Wednesday, August 13, 1997
A Tale of Two
Pennies
by
TMF Edible
It was the best of times. It was the worst of crimes. I was young and Wise beyond my years and it was another hot Miami August in 1991. It was the summer of this content.
My wife and I were newlyweds. All we had we put into our first home. Despite having four college degrees between us we were working at the same tired jobs we all find at Rung One of the wobbly ladder of destiny.
With all our hopes of a better tomorrow came the reality that four decrepit walls were sucking at the scraps of our open wallets. So we had little to invest despite our intentions. They always say "Pay Yourself First" but we were sending ourselves pink slips. There was nothing wrong with Taco Bell wishes and Subaru dreams. We were in love and it was the summer of us -- content.
When change eventually found our pockets I pored through the financial pages to find a suitable home. The sum of our labor could afford just a handful of the shares I wanted. What would I do with a scant stake in Microsoft or Intel? I was a penny-stock accident waiting to happen. And I happened.
Jillian's Entertainment. It was a local billiard parlor with decent expansion potential. The ticker symbol pulled me in -- QBAL. A company this clever couldn't trade for $1 5/8 for too long. Right away I told my wife that when we had a child our modest investment in Jillian's would bloat to cover his or her college education. With a little more to spare I also bought shares in our bank, American Savings & Loan. This one was profitable after teetering on bankruptcy the year before. At $1 1/8 I was not as hopeful but figured if the bank went under I had more to worry about than the few hundred shares I could afford.
Earnings continued to grow at our bank and the stock eventually split 1-for-5. It was a reverse split that vaulted the company out of penny-stock status. By the time our son was born in 1993 the company was bought by First Union for a little more than $20 a share. It was the summer of disco in tents.
What about little Nicky's college workhorse? Just last month Jillian's accepted a merger offer. Fifty cents a share. The stock more than doubled on the news; it had whittled down to less than a quarter by then. 8-ball, corner socket. Good thing Nicky's a smart toddler and fond of green army men.
I think back to what my meager investment would have made in Microsoft. While my son wouldn't have an Ivy League locked up he would at least be in a position to afford more than a text book. I now realize that it's not the size of the float; it's the motion in the ocean that matters. And if the choice to buy 100 shares at a buck of an unproven company or just 10 shares of a successful one at $10 my choice would be entirely different now. For that summer of 1991, it was the summer of dissed intent.