How FedEx Bet Everything on Blackjack

Imagine betting the fate of your company on a game of blackjack. It sounds like the plot of a movie, but for FedEx, it was a reality.

The Early Days of FedEx

In the early 1970s, FedEx was on the brink of bankruptcy. Founded by Frederick W. Smith in 1971, the company aimed to revolutionize overnight delivery. However, by 1973, FedEx was struggling financially. The Federal Reserve, which FedEx had hoped would be a major client, decided against using their services to transport checks overnight. This decision left the company without a critical source of revenue.

The Oil Crisis

Compounding their troubles, the 1973 oil crisis caused fuel prices to skyrocket, making it even more difficult for FedEx to stay afloat. With mounting debt and dwindling funds, FedEx needed a miracle to survive.

A Desperate Gamble

With just $5,000 left in the company’s bank account, Smith made a desperate decision. He took the last of FedEx’s money to Las Vegas and gambled it on blackjack. In an astonishing turn of events, Smith won $27,000. This unexpected windfall provided just enough capital to keep FedEx operating for a few more days.

Turning the Tide

This risky gamble bought FedEx the time it needed to secure additional funding. Smith managed to raise $11 million in new capital, which helped stabilize the company. FedEx also refined its operations, focusing on efficiency and reliability. These changes, combined with their innovative hub-and-spoke distribution model, set the stage for future success.

The Rise of a Giant

By the late 1970s, FedEx was turning a profit and expanding rapidly. Their commitment to overnight delivery and customer satisfaction paid off, making FedEx a household name. Today, FedEx is a global logistics giant, with revenues exceeding $69 billion and operations in over 220 countries.