Fedex Ceo Blackjack
Smith also recounted the story to Charlie Rose in 2008, but the FedEx founder and CEO isn’t the only one who’s benefitted his business by playing blackjack. PIMCO founder Bill Gross credited much of his investment success to his early days spent playing the casino game, according to CNNMoney. The incident is true as stated in my book, 'Changing How the World Does Business'. There are other stories in the book that are just as interesting and even more remarkable. FedEx founder and CEO Fred Smith is also a part owner of the Washington Redskins. By 1973, Smith was so desperate for cash that he flew to Las Vegas to play the blackjack tables. He wired the $27,000 he won back to FedEx. Smith's persistence paid off. By the late 1970s, America came to rely on FedEx' ability to deliver goods overnight - be it spare parts, urgent business documents, or 11th-hour birthday gifts.
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Within a few years of starting FedEx, Fred Smith made a real gamble to keep the company afloat.
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Smith founded the Federal Express in 1971 and it began operations in 1973. The company was based on an idea he wrote about in a term paper in 1965 while he was an undergraduate student at Yale.
In his paper, he explained how companies could deliver items faster if they changed their shipping strategies, according to the FedEx website. However, Smith’s professor didn’t think the idea was possible, so Smith's paper was only given a C, Entrepreneur magazine reported in 2008.
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Smith wasn't deterred. After he graduated from Yale and served in the Marine Corps for two tours of duty in Vietnam, Smith bought controlling interest in Arkansas Aviation Sales in 1971, the FedEx website said.
With his new company, Smith realized how difficult it was to ship items within a few days, so he decided it was time to try to put his Yale term paper to use.
According to Entrepreneur, Smith raised $80 million in loans and equity investments by the end of 1972.
FedEx founder and CEO Fred Smith is also a part owner of the Washington Redskins. (Redskins.com)
FedEx began operations in April 1973 and quickly grew. However, rising fuel costs eventually caught up with the young company, putting FedEx millions of dollars in debt, Entrepreneur reported.
Investors declined to give FedEx more money and Entrepreneur reported that 'bankruptcy was a distinct possibility.'
When the company had only $5,000 left, Smith pitched General Dynamics for more funding, but the board refused.
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On his way home, Smith took a detour to Las Vegas and won $27,000 playing blackjack, which he wired back to FedEx, Forbes reported.
'The $27,000 wasn't decisive, but it was an omen that things would get better,' Smith said about the gamble, according to Entrepreneur.
'I was very committed to the people that had signed on with me, and if we were going to go down, we were going to go down with a fight,' he said. 'It wasn't going to be because I checked out and didn't finish.'
Fedex CEO Fred Smith is pictured at a business roundtable meeting in 2012. (REUTERS/Jason Reed/File Photo)
Fedex Ceo Blackjack
After his blackjack win, Smith was able to raise another $11 million, the magazine reported. And by 1976, FedEx's revenue had reached $75 million, according to Forbes. The company went public two years later.
According to the company website, FedEx reported $1 billion in revenue in 1983. Though it was hit hard by the 2008 recession, the company has bounced back.
According to Forbes, the company made $69.7 billion in revenue last year.
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Smith, who is still the CEO and chairman of FedEx, is estimated to be worth $3.9 billion, according to Forbes’ real-time net worth calculator.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| FDX | FEDEX CORPORATION | 165.98 | -0.12 | -0.07% |
Though gambling FedEx’s last $5,000 was a risky choice, Smith doesn't appear to regret his decision, according to a quote from an essay by Smith that Forbes published in 2017.
'No business school graduate would recommend gambling as a financial strategy, but sometimes it pays to be a little crazy early in your career,” Smith wrote.
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Today, we recognise one of the most legendary punts in history from a man well and truly in a league of his own. That man is Frederick Wallace Smith. Founder, CEO, and President of FedEx – and the story can only be described as extraordinary.
It was the mid-70s. The only time when what you’re about to hear was deemed even remotely acceptable. During the third year of FedEx operating as a business, the company found itself in a dire financial situation.
After a make-or-break business loan fell through, it seemed as though the future of FedEx was written in stone. The kind of stone they place above a grave. But Frederick Smith refused to go down without a red-hot fight. The man had served as a Captain in the US Marine Corps, after all – and during the Vietnam War. Surrender clearly wasn’t in his vocabulary.
At this point in time, our hero reached his crossroads moment. Smith took FedEx’s last US$5,000 to Las Vegas – where dreams are born and slaughtered every five minutes – to put it all on the line. At the blackjack table, there was a turn of good fortune… US$5,000 became US$27,000.
Enough to cover the company’s $24,000 aviation fuel bill with change to spare. In fact, this very punt managed to keep FedEx alive for another week. Needless to say, it paid off. One week stretched to two, two became four, and soon after, Smith successfully raised US$11 million for the company.
In 1976, FedEx reported its first profits amounting to US$3.6 million. Four years after, profits almost exceeded US$40 million with gross revenue at close to half a billion. Fast forward to the present day, FedEx has an international presence with a market cap of over US$63 billion and revenue just shy of US$70 billion (as of: Q4 2019). Definitely not too shabby for a risky arvo in Vegas.
Believe it or not, this is just one of many fascinating details surrounding the formation of FedEx. The initial inception of FedEx’s concept occurred to Frederick Smith while he was attending Yale. There, he submitted a paper on overnight delivery service in the information era for his economic class (for which he received a C grade). And while this doesn’t sound like that groundbreaking of an idea, keep in mind this was in 1962 back when doctors were telling pregnant women to smoke and questioning whether people of colour deserved human rights.
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In 2014, Frederick Smith was named the 26th Greatest Leader in the World by Fortune Magazine. As of 2017, he holds a net worth of US$5.4 billion.