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This Week in Trading History: Facebook Launches at Harvard

This week in trading history Mark Zuckerberg launched the first version of Facebook, the Explorer 1 launched into space, and Rolls Royce declared bankruptcy.

1st February

U.S stocks fell over 7% due to fear of entering the first World War. It wasn’t until 2nd April the U.S. officially entered the war.

The Explorer 1 was the first successful U.S. satellite launch, finally answering the Soviets in the space race. The Soviet launched Sputnik in October 1957 and the U.S stock markets had fallen 10% in the weeks following. When the Vanguard rocket failed on 6th December, stocks fell a further 6%. After the successful launch of Explorer 1, the markets were finally were back on the rise.

Google’s parent company, Alphabet, surpassed Apple as the most valuable public company on this day. The two companies would flitter back and forth for the title until Apple’s stock would fully take off in 2017. In 2020, the most valuable company in the World was Saudi Aramco with a market cap of $1.68tn, but Apple, Alphabet, Microsoft and Amazon were in the top five.

2nd February

The Federal Reserve tried to prevent the re-loaning of Reserve funds to brokers as the 1920s bull market reached historic heights. Stocks hit a brief decline whilst speculators feared that the bull market was on its last legs however. As banks continued to lend to speculators the bubble remained inflated until 3rd September 1929 when the Great Depression hit.

Open Text went public, spurring on other search engine companies to join the tech bubble and go public. Within four months of Open Text, Lycos, Excite and Yahoo all had IPOs. Open text was relatively volatile during the tech bubble, their share price jumping between $1.19 to $6.67.

3rd February

In Holland, the Tulip market crashed. In one day there were no buyers for tulips, after reach ingprices as high as 6,000 Guilders for a single bulb. For reference, at the time, the average wag was between 200-400 Guiders and a small-town house would sell for around 300 Guilders. By May 1638 tulip contracts were annulled for 3.5 cents on the dollar, a total drop of 96.5%.

A day after the Fed had released orders to stop banks lending, the National City Bank of New York announced $25m in lending for stock market speculators.

4th February

Rolls Royce declared bankruptcy. However, they were able to build themselves back up again and in 2019 the company had a total asset of £32,266m.

A 19-year-old Mark Zuckerberg launched Facebook. The website was first only open to Harvard students, but as we all know, this quickly expanded. Facebook had its IPO on 18th May 2012 and the company was valued at $90bn, making it the largest IPO in history at the time. As of 2020, 2.7 billion people were active users on Facebook and the company had a net worth of $735.8Bn.

5th February

Laker Airways collapsed, owing £270m to banks and other creditors. Laker Airways was one of the first low cost airline operating out of the UK. Their headquarters were in Gatwick Airport and began operating in July 1966.

6th February

Ronald Reagan, the 40th President of the United States, was born on this day. Prior to becoming President he was a successful actor, appearing in over 50 movies including ‘Cowboy from Brooklyn’ and ‘Kings Row’. He was a Republican and supported anti-Communist movements worldwide, expanding the military and ultimately leading to the end of the Cold War.

7th February

Bruce McCandless became the first human to fly free in space. Using a gas-powered jet pack, he was untethered and floated 300 feet away from the space shuttle Challenger and back again.