This revolutionary growth stock was in big trouble. During the turmoil of 1969, a little known company He was the poster child for what went wrong at that time. The thing is that just four years after its establishment, this company got listed in 1968 at just US$6 per share. Over the next two years of “share swaps” and cash deals, the company purchased 27 companies, with revenues reaching US$68 million. Share swaps mean that a company creates new shares and uses them to buy other businesses. This way, the company does not need to raise cash. And the more valuable the shares, the more businesses he can buy. The stock went ballistic. At one point, it reached US$52 per share and then reached US$140 million. It was a classic case of fundamentals not mattering. Gerald Tsai’s Manhattan “Glamour Stocks” fund bought 122,000 shares at an average of US$41. Even the endowments of Harvard and Cornell universities were in it….
