FedEx True Story: Fred Smith founder and current Chief Executive Officer saved the day for FedEx with a 5 thousand dollar gambling spree in Vegas.
FedEx true story about how Fred Smith saved the day
During the early days of a new business it is easy to suffer cash flow problems due to sporadic payment problems. For a growing business to survive it needs credit lines to fund cash flow deficit at times. No one will ever know what the reasons behind this FedEx true story are, except Fred Smith.
Fred Smith founded the company during 1971 with a personal 4 million dollar investment and an additional 90 million investment. The objective was to build a company which could send overnight deliveries to anywhere in the world. You might think that was a very bold undertaking but no other company was offering this type of service at the time. Well that was a big gamble in itself.
Things did not go so well for Fred Smith due to rapidly rising fuel costs. This was not a predictable event, it was due Arab oil producers imposing an oil embargo in 1973. If you are old enough you may remember the price of gas guzzling cars plummeted almost overnight.
The company was soon facing bankruptcy with losses of more than a million dollars a month. It was a disaster for Fred Smith. He found himself with just 5000 dollars in the FedEx bank account and no way to purchase fuel for the planes the following Monday. Would this be the end of FedEx?
Fred Smith was obviously a deeply troubled man with the world on his shoulders. Inexplicably he withdrew the 5,000 dollars and set of for Las Vegas. He must have been a truly desperate man with everything to lose. Fortunately for Fred Smith, he managed to win 27,000 dollars and on the Monday morning his management team found 32,000 dollars in the FedEx account.
Happy Ending to a FedEx true story
This happy event enabled FedEx to remain afloat and avert a crisis. It gave the management team time to restructure costs and charges for their services. By 1976 the company showed a first profit of 3.6 million dollars. Today FedEx is reported to be worth more than 25 billion dollars.
Fred Smith probably took the biggest gamble of all time playing Blackjack with the company bank balance. Fred Smith later joked that the company could not have flown away because there was no money for fuel.
How different this FedEx true story could have been.
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