One of the high-flying tech stocks of the 1990s that fell to earth this decade is about to disappear, with Gateway agreeing to be sold to Taiwan’s Acer for 710 million. Why is this a media story? Because Norman Waitt cashed out near the high to buy radio and TV stations, while brother Ted stayed with Gateway to what could now be called the bitter end. While Ted was very public and appeared in Gateway’s TV ads, elder brother Norm, though a co-founder, stayed in the shadows and retired from the company as it soared in the early ’90s. In 1998 Inc. magazine estimated that Norman Waitt’s Gateway stock was worth 1.1 billion just before he began selling it off to the point that he was no longer a 5% owner and, thus, no longer had to report stock sales to the SEC. Norm Waitt chose to invest that cash haul elsewhere, including a group of Midwestern radio and TV stations clustered around his base in South Dakota near Sioux City, IA. Via a merger, he is now a major shareholder of NRG Media, including syndicator Waitt Radio Networks. He also still owns one TV station, KMEG-TV (Ch. 14, CBS) Sioux City, and has other media investments in films, outdoor and interactive, along with real estate and other non-media holdings. Ted Waitt owned many more shares of Gateway, which peaked above 80 bucks a share in 1999, but has lately be trading around 1.20. He no longer runs the company, but remains a major shareholder. The buyout at 1.90 per share looks to be worth about 123 million for him.
RBR observation: There is no indication that Norman Waitt saw what was ahead for Gateway or had any animosity toward his brother. He just wanted to go do other things instead of selling computers for the rest of his life. According to his WaittCorp LLC website, the entertainment investments grew out of his "passion" for music. "From movies and production, to broadcast and outdoor, to new media technologies, WaittCorp is itself an example of how doing what your love can also mean living what you dream," the website states. Seems like a pretty good philosophy for a happy life.