Soaring AOL Lifts CEO’s Holdings Past $1 Billion
America Online Inc. Chief Executive Steve Case’s holdings have eclipsed $1 billion in value, as the former pizza-toppings developer reaps the reward of a soaring share price for the No. 1 Internet service.
Case, who worked for Tricon Global Restaurants Inc.’s Pizza Hut before joining AOL’s predecessor company in 1983, owns about 8.54 million shares and options, according to regulatory filings. His holdings on Wednesday reached a value of $1.18 billion, based on AOL’s closing price of $138, then edged down to $1.17 billion as AOL slipped $1.31 to close at $136.69 on Thursday.
AOL on Thursday joined the benchmark Standard & Poor’s 500 index, effective Dec. 31, in what amounts to a crowning moment for Case. He overcame doubters and customer-service snafus to establish AOL as the dominant online-access company, with 14 million subscribers. Along the way, AOL acquired chief competitor CompuServe Corp. and is buying Web-browser software maker Netscape Communications Corp.
“In a sense, Steve Case built the company from the ground up,” Ryan Jacob, a portfolio manager with the Internet Fund, said in an interview with Bloomberg News. “He deserves it.”
After his stint at Pizza Hut, Case entered the computer world at Control Video, a service that delivered video games to computers. Soon afterward, Control Video became Quantum Computer Services, initially offering online services for the now-defunct Commodore personal computers. Quantum transformed into America Online, and Case took the CEO spot in 1992 and the role of chairman in 1995.
AOL shares have climbed more than sixfold this year, and they may continue to rise on optimism for Internet stocks and purchases by index mutual funds that seek to mirror the S&P; 500, analysts said.
Case joins several other Internet entrepreneurs who’ve become overnight billionaires, at least on paper.
Amazon.com Inc. Chairman and Chief Executive Jeff Bezos owns 19.6 million shares of the online retailer valued at about $6.37 billion. Yahoo Inc. co-founders David Filo and Jerry Yang have stakes of more than $1 billion in the leading Internet directory.
Two other AOL executives also have stockpiled shares and options valued at more than $300 million each.
Chief Operating Officer Bob Pittman, who founded Viacom Inc.’s MTV Networks, has 3.98 million shares and options valued at about $549.2 million.
Lennert Leader, formerly AOL’s chief financial officer and now president of AOL Investments, which manages the company’s investments in private and public companies, has 2.57 million shares and options worth about $354.7 million.
