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GOLF
Tim Rosaforte
January 15, 1996
The Rest Coast Tour
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January 15, 1996

Golf

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Here's how Greg Norman turned a $1.9 million investment in Cobra Golf, Inc.—which was recently sold to American Brands, the parent of Titleist—into a $40 million windfall:

In July 1990, Norman purchased 12% of privately owned Cobra for $1.9 million and was paid a retainer to represent the company and help design King Cobra woods and irons.

In September 1993, when the company went public, Norman sold 208,334 shares at $19.53 per share for $4,069 million. In April 1994, in a secondary offering, Norman sold another 262,414 shares at $29.68 each for $7.7 million.

In May 1994, Norman became a company director and received stock options for 125,000 shares exercisable over a five-year period at $39.25 a share. The next month Cobra stock split, changing Norman's options to 250,000 shares at $19.625 each.

Including his stock options, Norman owned 3.3% of the company when it was sold to American Brands last December. With a buyout at $36 a share, Norman woke up on Dec. 18 richer by $28 million. His return on his initial $1.9 million was $39,768,760 (1,993%). He also will be paid an endorsement contract by Cobra through the year 2000.

"Not a bad investment," Norman says with a satisfied smile. "I did very good on that one."

Out of Harmony

Last season Norman may have won four tournaments worldwide, had the lowest stroke average on Tour and been named Player of the Year by his peers, but he still felt the need to replace swing coach Butch Harmon.

"The athlete, the individual, knows when he feels good and doesn't feel good," says Norman. "I didn't feel good at all from June or July last year. I felt uncomfortable. To do what I did at the end of the year [winning the World Series of Golf and the Australian Open] kind of amazed me to tell you the truth. I knew something wasn't right there, and I couldn't put my finger on it."

Don't worry. Harmon won't be hurting for customers. He will continue to coach Tiger Woods, Davis Love III, Mark Calcavecchia, and last week he was in Miami working with Raymond Floyd's sons, Robert and Raymond Jr., before they returned to school.

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