If You Bought 100 Shares Of Coca Cola In 1919 You Would Be A Very Happy Person Today

Coca-Cola was founded in 1886 by a pharmacist named John Pemberton. Unfortunately, within two years John was bankrupt, thanks largely to a terrible morphine addiction. John managed to hold on to a small stake in Coke, which he left to his son upon his death in 1888. His short-sighted son wanted cash. The son ended up selling the remaining stake in the patented formula to businessman Asa Candler in 1888 for $2,300. Over the next 30 years, Asa Candler became one of the wealthiest men in America thanks to the exploding popularity of Coke. Asa sold the rights to the company to a consortium of businessmen led by a man named Ernest Woodruff in 1919 for $25 million. That’s equal to $340 million today. Woodruff re-incorporated Coca-Cola in Delaware and took the company public later that same year. On the first day of trading, one share of Coca-Cola common stock cost $40, a single share of preferred stock cost $100. The original ticker symbol was CCO. The ticker symbol was changed to KO in 1923. After the first day of trading was done, Coke had a market cap of $30 million, roughly $405 million today. Contrary to what you might think, Coke’s foray as a public company wasn’t very successful at first. One year after the IPO, that same $40 share was selling for $19. A more than 50% drop. And this was still years away from the Great Depression. 100 Shares Today 100 shares of common stock on the day of the IPO would have cost you $4,000. That’s about the same as $54,000 today. No small sum. Let’s also assume that over the last 96 years, every time you got a dividend, you used it to buy more shares of Coke. How rich would you be today? According to Coca Cola’s 2012 proxy statement, if you followed the scenario we just described, a single $40, 1919 share with dividends reinvested would be worth $9.8 million. So if you managed to buy 100 shares, today you would be sitting on a $980 million fortune. Just $20 million shy of billionaire status, thanks to a $4,000 investment made 96 years ago. Now if you’ll excuse me, I need to keep working on my Flux Capacitor.