While FedEx might now look like a highly successful company, its founder once saved the company by taking its last $5,000 and turning it into $32,000 by gambling in Las Vegas.
In 1971, Frederick W. Smith, founder and current CEO of the company, took his personal fortune of around $4 million and raised an additional $90 million to found a delivery company structured so that it could potentially deliver packages overnight to anywhere in the world. This is something that, at that time, had never been done.
Unfortunately, three years after the company began, thanks largely to rapidly rising fuel costs, Federal Express was on the verge of bankruptcy. They were losing over $1 million a month, with no one willing to give them any additional loans or any investors interested in contributing capital.
At its low point, all the company had was $5000 to its name, leaving FedEx more or less dead on the ground when they were not be able to fuel their planes the following Monday. Not to be dissuaded, instead of taking a flight home to Memphis, Smith took the $5000 and flew to Las Vegas and played Black Jack that weekend with the remaining company funds. By Monday, to the shock of other higher-ups in the company, FedEx had $32,000 in its bank account, which was just enough to cover the fuel for their planes and to continue operating a few days more. When asked what he’d been thinking by taking a chance like that with company funds, he stated, “What difference does it make? Without the funds for the fuel companies, we couldn’t have flown anyway.”
It turns out that a few days more was all he needed. Shortly thereafter, Smith successfully managed to raise $11 million to keep the company afloat and, by 1976, Federal Express made its first profit of $3.6 million. Four years after that, the company’s profits were up to nearly $40 million with a gross revenue of nearly half a billion dollars. Today, FedEx is estimated to be worth $25-$35 billion, with Smith himself currently worth around $2 billion.