September 30 in business history: one possible buyer, a free interface, and a $7.25 reference price
Three September 30s — a nuclear submarine with only one possible customer in 1954, an Ethernet specification three vendors published free in 1980, and two direct listings priced by an opening auction in 2020 — show how the terms of a first sale get set by someone other than the seller.
Three September 30s, and one question asked three times: when the thing has never been sold before, who sets its terms?
In 1954 the United States Navy commissioned a submarine that ran on a reactor, a power source no navy had ever operated at sea. In 1980 three manufacturers published the design of a computer network they had invented at one of their own laboratories, and let anyone build to it for nothing. In 2020 two software companies began trading on the New York Stock Exchange without selling a single new share. Each maker handed the terms to somebody else in the end — a customer that had to build the industry first, a market of rivals that had to adopt the design, and an opening auction with no bank standing behind it.
A ship with exactly one possible buyer
The USS Nautilus was commissioned at Groton, Connecticut, on 30 September 1954 with Commander Eugene P. Wilkinson in command, the first ship in any navy to run on nuclear power 1. The boat came out of a programme run by Captain Hyman G. Rickover at the Naval Reactors Branch of the Atomic Energy Commission, and the Navy was its only possible customer from the first drawing 1.
Congress authorised the submarine in July 1951, eleven months before its keel was laid at the Electric Boat yard in Groton, at a time when the machine that would drive it existed only on paper 2. Westinghouse Electric and the Bettis Atomic Power Laboratory had been designing a pressurised water reactor for a submarine since 31 December 1947 2. The Navy proved the design on land before it went to sea: the S1W prototype reactor ran at the National Reactor Testing Station in Idaho in 1953 3. The service bought a reactor industry, and the boat came with it.
Nautilus displaced 3,533 tons on the surface and 4,092 submerged, ran 320 feet long, made 23 knots, and carried 13 officers and 92 enlisted men 3. It stayed dockside for months of testing after the commissioning ceremony, then on 17 January 1955 signalled the escort tug: "Underway on nuclear power" 3. On its shakedown run that May it travelled 1,381 miles from New London to Puerto Rico without surfacing, 89.8 hours under water, the longest submerged cruise any submarine had managed and the highest sustained submerged speed recorded for a run over an hour 1. A Navy study the following year concluded that the anti-submarine tactics of the Second World War were useless against a boat that could stay down, dive deeper and leave a search area in record time; by 1961 the fleet had about a dozen nuclear submarines 1. Nautilus passed under the North Pole on 3 August 1958 and was decommissioned on 3 March 1980, having steamed more than half a million miles 12.
Decision mirror: Sixty years later the same dependency runs the other way. Australia intends to buy three in-service Block IV Virginia-class submarines from the United States, for delivery in 2032, 2035 and 2038, and it holds an option on two more new boats in the 2040s 4. To get them, the buyer is paying to expand the seller's factory: Australia agreed to put about $4.6bn towards United States shipbuilding capacity, had paid $1.6bn by mid-2025, and committed to US$2bn by the end of that year, with a matching amount going to British yards 5. The constraint is the production line. The United States needs a rate of 2.33 Virginia-class boats a year to meet its own readiness needs and the AUKUS timetable; it builds closer to 1.2 to 1.3 4. Before any boat changes hands, the American president has to certify that giving it up will not reduce United States undersea capability 5. In 1954 one government funded the factories that made its own submarine possible. In 2026 a second government is funding them to get one.
A standard nobody was charged to use
On 30 September 1980, Digital Equipment Corporation of Maynard, Massachusetts, Intel Corporation of Santa Clara and Xerox Corporation of Stamford published Version 1.0 of a specification called The Ethernet: A Local Area Network — Data Link Layer and Physical Layer Specifications 6. The document described a network running at 10 megabits a second over coaxial cable, with a maximum station separation of 2.5 kilometres and a maximum of 1,024 stations on one cable 6.
The design came out of Xerox's Palo Alto Research Center, where Robert Metcalfe proposed in 1973 that the packet-radio scheme of the University of Hawaii's ALOHA network be run down a single coaxial cable with no central controller 7. The lab needed it for itself: its Alto personal computers, its laser printers and its file servers all had to reach each other inside a building 7. Metcalfe and Dave Boggs had a working prototype that year, running at 2.94 megahertz 7.
Then the three companies gave the interface away. Intel's own corporate history records that DEC, Intel and Xerox "allowed manufacturers to adopt the Ethernet standard for free to help foster its universality," and that the arrangement took the nickname of its authors, the DIX standard, for Digital, Intel and Xerox 8. The published document is more guarded about what had actually been handed over: it states that the specification covers patents belonging to Xerox, and that no licence under those patents is granted by implication or estoppel 6. The protocol was open to copy. The patent position was left where it was.
The market answered faster than the lawyers sorted that out. By 1981 Xerox had installed 75 Ethernets at 40 sites in the United States and Britain, serving more than 1,350 Altos; by 1985 an estimated 500,000 Ethernet adapters had been installed worldwide, on roughly 100,000 networks 7. The 1980 specification became the basis of the IEEE 802.3 standard, and the interface that three vendors published free is the one most office networks still use 7.
Decision mirror: The question the DIX partners settled with a free licence is being renegotiated now, in the wiring that connects artificial-intelligence computers to each other. In the first quarter of 2026, Ethernet switch sales in AI back-end networks more than doubled from a year earlier and took about two-thirds of data-centre switch sales in AI clusters, while the specialised rival, InfiniBand, more than tripled off a smaller base 9. Switches running at 800 gigabits a second accounted for most of the revenue, and 1,600-gigabit parts had started sampling for a second-half ramp 9. The vendor list is the tell: Celestica led the quarter, Nvidia ran it close, Arista took third with AI revenue still deferred, and Cisco recorded the largest share gain 9. Forty-five years after three companies published the standard so that no single vendor could own the office, the same openness is what lets four competitors fight over the inside of the data centre.
A listing where no shares were sold
On 30 September 2020 the New York Stock Exchange ran two direct listings on the same day — Palantir Technologies and Asana — alongside four conventional initial public offerings, and Palantir's opening auction was the largest the exchange had ever conducted for a new listing 10. A direct listing works without the machinery of an IPO. No bank builds an order book, no underwriter stabilises the price afterwards, and the exchange sets a reference price with the company's adviser so that the opening auction has a starting point; the auction itself, not the adviser, produces the price 10.
The reference prices were $7.25 for Palantir and $21 for Asana 1112. Palantir opened at $10, closed at $9.50 and ended the day valued at $20.6bn — below its first trade, above the $9.17 weighted average its shares had fetched in private trades that September 11. Asana opened at $27 and closed at $28.80, a valuation above $4bn against a private-market average of $25.11 in August 12. Neither company received a dollar of the proceeds, because no new shares were sold; existing holders sold what they held, straight to the market 12.
Palantir had lost money in each of its 17 years, including a net loss of $164.7m on revenue of $481.2m in the first half of 2020, and the auction priced it near the level of its 2015 private fundraising 11. Kathleen Smith of Renaissance Capital drew the boundary the structure had to clear: with a direct listing, the appropriate starting price is the opening trade, and for the format to gain traction, investors had to make money 11. Palantir closed below its opening trade, so the first public buyers were down on the day. Asana's chief financial officer, Tim Wan, put the appeal from the other side of the table: an IPO that pops 20%, 30% or 50% leaves the chief financial officer wondering what was left behind 12.
Decision mirror: Six years on, the price that auction produced looks like a rounding error. At the end of September 2026 Palantir carried a market value of about $449bn, the 29th largest company in the world 13. In the second quarter of 2026 it reported revenue of $1.94bn, up 93% from about $1bn a year earlier, and net income of $1.07bn, or 41 cents a share, against about $329m, or 13 cents, a year earlier; United States commercial revenue rose 149% to $764m 14. The same stock has fallen 29% this year 14. An opening auction prices the day it runs and nothing after it: about 22 times the listing value six years later, with a 29% drawdown inside the last twelve months.
Three questions for the week
- Who is the only customer who can buy this, and what do they have to build before they can? The Navy funded the reactor programme and the Idaho prototype before Nautilus could be commissioned, then bought about a dozen nuclear submarines by 1961 12. Australia is paying about $4.6bn into the American yards, against a production rate of 1.2 to 1.3 boats a year and a requirement of 2.33 45.
- If you give the interface away, what is left to sell? The DIX partners released the specification free and kept their own hardware businesses; by 1985 about 500,000 Ethernet adapters had been installed worldwide 78. In 2026 the same open interface carries about two-thirds of AI cluster switch sales 9.
- What did the first price actually predict? Palantir's direct listing valued it at $20.6bn, on a reference price of $7.25 and a $9.50 close 11. The market values it at about $449bn today, and it has still fallen 29% in a year 1314.
References
- 1Naval History and Heritage Command, "Nautilus (SSN-571)"
history.navy.mil
- 2
- 3Wikipedia, "USS Nautilus (SSN-571)"
en.wikipedia.org
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- 8Intel, "Explore Intel's history — The Ethernet Standard"
timeline.intel.com
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- 13CompaniesMarketCap, "Palantir (PLTR) — Market capitalization"
companiesmarketcap.com
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