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This Week in Trading History: Facebook & Netflix Go Public

This week in trading history was a millennial’s dream as both Facebook and Netflix went public. Warren Buffett also had some stern words and the iconic Marilyn Monroe sang “Happy Birthday”…

17th May

The New York Stock Exchange was born. A group of 24 brokers came together to sign the Buttonwood agreement, which established the rules and rates of commissions. Commissions were set at no lower than 0.25% until “May Day”, when they were officially lowered.

18th May

Facebook went public with an IPO of $38 and a market cap of $104bn. As of May 2020, Facebook’s net worth is $598.6Bn and shares are $205.10.

19th May

Due to the Great Depression, 8 million Americans were unemployed and faced starvation. The Fed was working on creating major construction projects to create jobs and boost the economy, with the price of this construction in excess of $1bn. They also made the decision to cut wages by 30% for 12 months and continued to fund the banks to keep businesses alive.

Marilyn Monroe performed her famous rendition of “Happy Birthday” for President John F. Kennedy’s 45th birthday. The dress she wore, designed by Jean Louis, was sewn with 2500 rhinestones and was sold at auction for over $1.26m.

20th May

Nazi Germany advanced towards Paris, as a result of the news Wall Street stocks fell more than 6.5% due to a huge sell-off. Rumours of the New York Stock Exchange closing also began, however the NYSE never closed due to WW2, unlike in World War 1 when it closed for nearly four months.

The U.S. Supreme Court overturned a state court ruling for BMW to pay an Alabama doctor who had attempted to sue the company for selling him a BMW that had been repainted. Dr. Ira Gore was originally given $4m in actual and punitive damages… even though the car was in perfect condition. The Supreme Court said that the payment was “grossly excessive” and BMW was unscathed by the unjust case.

Five paintings were stolen from the Museum of Modern Art in Paris. These paintings by artists such as Picasso, Matisse and Braque, were estimated to be worth over $100m and dated back to the early 20th century. The 49-year-old burglar Vjeran Tomic, dubbed “Spiderman” for his acrobatic heists, was sentenced to eight years in prison, however the art was never found.

22nd May

Windows 3.0 is released by Microsoft and became the best-selling software to date, selling one million copies in the first four months. The software was priced at $150. 1990 was the beginning of a decade-long rise in Microsoft’s stocks. In May 2020 shares are priced at $176.87.

Paul Mozer, trader for Saloman Brothers, attempted to corner the U.S. Treasury Market by illegally placing orders and buying 90% of the bills. This created a crisis for Soloman Brothers and Warren Buffett had to step in as temporary chairman. These events lead to Buffett giving his famous testimony stating “Lose money for the firm and I will be understanding. Lose a shred of reputation for the firm, and I will be ruthless.”

The Venezuelan government created a $79m credit for the importation of toilet paper, toothpaste and soap. Apparently, the country had been facing chronic shortages. Or… did they see something coming…

23rd May

Walt Disney incorporated their first company, Laugh-O-Gram films. After creating various short films, they declared bankruptcy a year later. However, the studio had a certain character that proved to be very inspiring for Walt Disney’s career, a mouse… Disney moved to Hollywood.

99% of U.S railroad workers went on the largest organised strike in U.S history. The strike crippled the nation for three days and lead to the New York Stock Exchange closing on the 25th of May.

Netflix became public with an IPO of $15 per share. Shares rose as high as $17.40, but closed the day at $16.75, up 12%. This gave them a market cap of $345m. In May 2020 stocks are at $442.81 per share.

24th May

The Brooklyn Bridge opened to traffic for the first time on this day. The bridge took 14 years to build and cost $15m, in 2020 that would be the equivalent to more that $380m.