This week in trading history we saw the first of the Nobel prizes awarded in Stockholm, Bernie Madoff was arrested, and the Soviet Union is no more...
At 7:48am Pearl Harbour was attacked by Japan. On hearing the news, the U.S. stock market closed for the day. The next day the Dow Jones Industrial Average dropped 3.49%, and stocks continued to drop by 10% into the next year.
The day after Bitcoin had reached its $12,000, $13,000, and $14,000 milestones, on this day Bitcoin broke new records rising over $15,000 ad $16,000 per share. The price continued to inflate until reaching its peak of $20,000 a week and a half later. In 2020, it would once again reach those highs.
The Soviet Union was officially dissolved as Ukraine, Belarus and Russia became “Commonwealth of Independent States” (CIS). U.S. stock markets had a minor drop of 0.50% on hearing the news, but overall, the Dow was up 9.47% in the month of December, and 20.32% for the year.
The Dow dropped another 2.90% in reaction to the Pearl Harbour attack.
VA Linux System IPO'd with a price of $30, and shares rose to $299 on first print. Through the day trading peaked at $320 but closed at $239.25, marking a rise of 698%, making it the biggest IPO “pop” in history. Larry Augustine became a millionaire overnight; however, it wasn’t long until it all came crashing down. A year later, shares traded at $8.49 per share.
The first Nobel Prizes were awarded in Stockholm. A few of the winners included; Wilhelm Conrad Rontgen, a physicist who produced an Xray of the inside of a hand; Emil von Behring, for his work on serum therapy in its application against diphtheria; and Henry Dunant, the founder the of International Committee of the Red Cross. The Nobel Prize is a fund that was created when Alfred Nobel, the inventor of dynamite, passed and left his fortune to be gifted annually to those who “shall have conferred the greatest benefit on mankind”.
The Bank of the United States declared bankruptcy. Everyone believed the worst of the Great Depression was over as the stock market was up 50%, although the closing of the Bank of the United States proved otherwise. This restarted the panic in the country.
Capital Cities IPO'd at $5.75 per share. The company started with a market capital of $299,000, and by 1995 the company was sold to Disney for $19bn. Under CEO Tom Murphy’s guidance, investors of Capital Cities had an annual compounded return of over 35%, making it one of the best long-term track records in history.
The Dow closed above 1500 for the first time. In December 2020, the Dow traded at 30,218.26.
Bernie Madoff was arrested. Madoff’s huge ponzi scheme amounted to around $65bn in fraud, making it the largest ponzi scheme in history. It wasn’t until the 2008 financial crisis hit and Madoff ran out of money to give back to his investors that he was caught out. He was sentenced to 150 years in prison.
Stock markets reopened for the first time since closing for the war on the 31st July 1914. On the first day, stocks were 4.4% higher than when WW1 had begun.
Apple had its IPO at $22 per share. This was one of the most oversubscribed IPOs in history. Stocks rose nearly 32% and closed the day at $28.75 per share. The first day of trading gave Steve Jobs a net worth of $265m, when he died in 2011 his net worth had risen to $10.2bn.
Rupert Murdoch purchased the Wall Street Journal and its parent company, the Dow Jones & Co, for $5bn. This ended the Bancroft’s family ownership of the companies, which had lasted 105 years.