January 2nd – This Day in Stock Market History
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January 2nd, 1882 – The Standard Oil Trust is created.
John D Rockefeller created the Standard Oil Company in 1863, and grew it rapidly by making many acquisitions.
As his company grew and began operating in many different states, Standard Oil ran into problems navigating state laws. For example, some states charged extra taxes for businesses from out of state.
So on this day in 1882, Rockefeller consolidated all of the company’s assets into a trust, which allowed the “company” to avoid certain state taxes and laws.
The move would be wildly successful, and be copied by many other companies at the time.
Standard oil would be ordered to split up on May 15th, 1911 after it was ruled it was a monopoly. What was once Standard Oil became 34 different companies.
Interestingly, over the last several decades the pieces of Standard Oil have been slowly coming back together:
January 2nd, 2000 – Shares of Yahoo reach their all time high of $500.13.
This day in 2000 marks the peak of one of the dot com bubble’s most infamous names.
On this day, Yahoo would reach its all time peak of $500.13 per share, which equates to $125 per share factoring in future stock splits.
The share price would give Yahoo a market capitalization of $121 billion.
Yahoo IPOed on April 12, 1996 with a market cap of $848 million. The company’s valuation would quickly grow as the dot-com bubble inflated.
By this day in 2000, Yahoo’s net worth had increased 120x. However, the company’s net income never quite kept up with its valuation.
For fiscal year 1999, Yahoo reported $61 million in net income, giving the company a P/E Ratio of over 2,000.
By September 2001, Yahoo would be down to $8 per share.
Verizon would ultimately acquire Yahoo in 2016 for $4.8 billion dollars, a 96% decline from it value at the peak of the dot com bubble 16 years prior!
Best January 2nd in Dow Jones Industrial Average History
1931 – Up 3.2%, 5.26 points
Worst January 2nd in Dow Jones Industrial Average History
1932 – Down 4.21%, 3.28 points
