Rescue by Gambling

Rescue by Gambling

Fred Smith, the founder of FedEx, once rescued the company from bankruptcy by playing blackjack in Las Vegas.

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Within a few years of starting FedEx, Fred Smith made a real gamble to keep the company afloat. 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 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.

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.

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. According to Forbes, the company made $69.7 billion in revenue last year.

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