It was 1999, we had just moved to Seattle, and all these people I had just met who were in their early 30's were retiring from Microsoft. Not just from MS -- they were retiring. Near the millenium, with the stock sitting at about $120/share, a good friend who had started at MS as a receptionist and moved all the way up to program manager (a rather common title, in those days) decided to call it quits. She cashed out, worth some $7.5MM, bought property on the Baja in Mexico and left town. Never saw her again.
Then, after the bubble popped in March 2000, I can recall people losing their million-dollar homes in Queen Anne because they had secured the purchase with options on IPO stock. All the sudden, their paper was worthless -- and a lot of people were left scrambling.
I remember stories of people who leveraged all this paper wealth, only to be left upside-down in the blink of an eye.
There was a story about a couple from Texas that loaded up with most of their personal wealth on Dell stock near its IPO point. Dell had IPO'd at a particularly low price point (so cheap, $0.05 / share, that you'd still have a 240 fold return today from that first year potentially), so it didn't take much to see huge wealth returned.
So as the stock kept going up, they kept leveraging up higher. They started from a few hundred thousand invested, ended up around $40+ million (Dell was a 1,000 bagger in ten years), but were carrying some insane leverage against it like $12 to $15 million at the peak. Never heard a follow up story, but they claimed they planned to just keep letting it ride and pushing the leverage up to boost returns - they had no concerns about a crash.
It was 1999, we had just moved to Seattle, and all these people I had just met who were in their early 30's were retiring from Microsoft. Not just from MS -- they were retiring. Near the millenium, with the stock sitting at about $120/share, a good friend who had started at MS as a receptionist and moved all the way up to program manager (a rather common title, in those days) decided to call it quits. She cashed out, worth some $7.5MM, bought property on the Baja in Mexico and left town. Never saw her again.
Then, after the bubble popped in March 2000, I can recall people losing their million-dollar homes in Queen Anne because they had secured the purchase with options on IPO stock. All the sudden, their paper was worthless -- and a lot of people were left scrambling.
I remember stories of people who leveraged all this paper wealth, only to be left upside-down in the blink of an eye.
Such foolish times for people with resources.