Sunday, September 25, 2005

Wall Street

1997 Salomon Lands Under Travelers Umbrella
The rich got richer when the financial services company Travelers Group acquired investment giant Salomon Brothers on this day. With a $9 billion price tag, the Wall Street stalwart didn't exactly come cheap, but the purchase promised to pay impressive dividends by strengthening Travelers sagging presence in America's investment circles, as well as in foreign markets. Still, the deal faced criticism. Some wondered whether Travelers could mesh the business and culture of its investment bank, Smith Barney, with that of Salomon Brothers, while others questioned the steep purchase price, which was roughly double Salomon's official value of $4.6 billion. There was also an inevitable round of layoffs to consider, which threatened to damage company morale. Such arguments seemed to matter little to Travelers' ambitious president Sanford Weill. After all, he had just completed a deal that promised to secure Travelers an elite position at the top of the investment community. And for Weill, such impressive results were exactly the point of the purchase. According to one board member, Weill was not simply strengthening his company, but was courting the immodest goal of building "the greatest financial services company in the history of the country and in the history of the world."
1944 Future Wall Street Star is Born
Michael Douglas, who played the infamous Gordon Gekko character in Oliver Stone's 1987 film Wall Street, was born on this day in 1944. Douglas won an Oscar for his portrayal of the unscrupulous stockbroker who audiences loved to hate.
1996 AT&T Sells Satellites
In a move to keep pace with the competition, Loral Space Communications announced on this day that it had acquired Skynet, AT&T's broadcast satellite division. The deal cost Loral a cool $712.5 million in cash, money that AT&T would use to try to dethrone the "Baby Bells" in the nation's long-distance and local markets.
1996 Back in the Wild Blue Yonder
With the takeoff of Flight 21 on September 25, 1996, Pan Am Airlines was in the skies and back in business. In 1991, financial woes had forced the once-prosperous airline to ground its fleet. While the revived company was armed with $40 million in capital and an experienced staff and management team, investors remained wary. After starting the day at an asking price of $15, Pan Am's stock made a modest gain to close at $16.75.


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