How Did Forrest Gump Amass His Fortune?
What if a shrimping business investment turned into one of the greatest tech investments of all time? That's exactly what happened to Forrest Gump, whose (theoretical) net worth stands in the billions today.
The movie Forrest Gump has a scene where Forrest says he does not have to worry about money anymore because Lieutenant Dan invested his money in a "Fruit Company" (Forrest the Billionaire Owns Apple and Cuts Grass for Free (youtube.com)). The Fruit Company was Apple and made Forrest Gump a self-proclaimed "Gazillionaire".
The Investment
Forrest received a letter from Apple Computer, Inc. dated September 23, 1975. The letter thanked him for his investment in Apple. That date is not possible. Apple was founded in 1976, and incorporated as Apple Computer, Inc. in January 1977. Apple had its IPO in December 1980.
To better estimate a date for the investment, we can use hints from the letter. The letter mentions the Lisa computer. According to Mac history, the Lisa project started in 1978 (Apple Lisa (mac-history.net)). Consequently, we can assume Forrest's investment was made around late 1978 or early 1979. The next questions are: How much money would Forrest/Dan have invested, and how much would that be worth?
Proxying the Investment
It is hard to determine how much they would have invested and how many shares they would have received. We could guess a number by proxying it with real investments in Apple before its IPO. We can go through Apple's capital structure and shareholding at their IPO. In the documents filed by Apple for their IPO, (available here: Apple_IPO.pdf (deramp.com)), under the "Certain Transactions" heading, we see how much of the company was sold at which value and when.
We have already determined that the letter was more realistically sent around 1979. The nearest investment round Forrest could have participated in was the issue of Preferreds in September 1978 as on page 26. The report states: "In addition, Venrock Associates purchased 22,222 shares of Preferred Stock, Series A, from the Company in a private placement in September 1978 at a purchase price of $9.00 per share for an aggregate purchase price of $199,998. These shares were subsequently converted, in accordance with their terms, into 711,104 shares of Common Stock (giving effect to subsequent stock splits)." The per-share purchase price would be around USD 0.28/share in post-split December 1980s IPO shares.
Valuing the Investment
Now to the question of how much money was invested. Lieutenant Dan took care of Forrest's Bubba-Gump money. We can try to estimate how much Bubba-Gump Shrimp was worth. Forrest bought the first ship for USD 24,562.47. At the end of his time with Bubba-Gump Shrimp, they had 12 boats. Using similar metrics, 12 boats were valued at USD 300,000. The boat Forrest bought was an old, not-so-great-looking boat.
With some very back-of-the-hand calculations, we can say the shrimp boat operation was worth at the very minimum, USD 500,000 (Bubba-Gump also owned a warehouse and had hats of course). Though, arguably, Bubba-Gump shrimp was worth much more, given they were the only shrimping boats operating around Bayou La Batre. I would say about USD 200,000 was invested on behalf of Forrest along with another USD 200,000 for Lieutenant Dan. This is purely a guess. You could move the needle here to change the headline number.
This implies Forrest had ~700,000 shares on IPO day. For a sanity check, this was worth approximately USD 15 Mn (or around USD 20 Mn, depending on the price you use) when Forrest said he was a Gazillionaire. It seems about right. Forrest spent the money in a few ways. He gave Bubba's Share to Bubba's mother - the split was 50-50. He gave a "whole bunch" to the Foursquare Gospel Church and a "whole bunch" to the Bayou La Batre fishing hospital. Suppose he gave a third to each, that left Forrest with a sixth of all the shares, or, 118,519 shares in December, 1980.
Forrest Gump's Net Worth
Now, we have the investment that is left with Forrest. Accounting for 5 stock splits, the 118,519 shares in December 1980 were 26,548,256 shares as of July 2024. Finally, taking the stock price as of 30th July 2024, the 26,548,256 shares of Apple were worth around US$ 6 Billion. Assuming no reinvestment of dividends, and no buying or selling action on Forrest's part, Forrest's Apple stake was worth close to US$ 6 Billion (as of July 2024). Suppose, Forrest held on to these shares (which in itself would be very unlikely), he would have had one of the greatest investing track records in the world by doing absolutely nothing.
DISCLAIMER
Please note, that this analysis is provided for entertainment purposes only. This is not financial advice. The author is not a financial advisor. The owner of this website is not responsible for any loss or damage caused by relying on the information provided. The author watched Forrest Gump and thought to figure out how much the Apple stake was worth today. The movie could have chosen any number of other listed companies, nearly all of which would never have had these returns.