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5 Small Decisions With Surprising Consequences

The Biggest
5 Small Decisions With Surprising Consequences

It usually takes years and years of hard work to make millions of dollars. Likewise, it usually takes many bad decisions to lose an amount of a similar magnitude. However, there are always exceptions! There are times when huge sums of money are made and lost in a matter of seconds, like when a typing error by a Japanese stock trader cost a firm around $225 million by trying to sell 610,000 shares at 1 yen (less than a penny) with the intention of selling 1 share at 610,000 yen ($5,041).

Sometimes, though, these exceptions aren’t due to a mistake but are the result of a considered business decision. One thing they all have in common? It’s unlikely that anyone would have predicted them! Here are five examples of seemingly small decisions that have had a huge financial impact:

Painting For Facebook Stock

In 2005, graffiti artist David Choe was asked to paint the offices of a startup in Palo Alto, California. He was offered the choice of being paid a few thousand dollars for the work, or taking the equivalent in shares. Choe didn’t really ‘get’ the startup, later saying he thought the idea was ‘ridiculous and pointless’, but he decided to take the stock anyway. The startup’s name was Facebook. Choe had to wait almost seven years for the company’s IPO but, when it went public, he was able to cash in his stock for $200 million.

Choe was already a successful artist, and has worked on everything from cover art for Jay-Z and Linkin Park to a poster for Barack Obama, but thanks to a smart business decision he doesn’t need to sell another piece for the rest of his life.

Blockbuster Turning Down Netflix

In the early 00s, Blockbuster had the chance to buy Netflix for the princely sum of $50 million. Sounds like a lot, until you realise that in 2013 Netflix’s market cap was around $20 billion. In a previous interview, Barry McCarthy (Netflix’s former chief financial officer) has hinted that Blockbuster weren’t particularly polite in turning them down…

I remembered getting on a plane, I think sometime in 2000, with Reed [Hastings] and [Netflix co-founder] Marc Randolph and flying down to Dallas, Texas and meeting with John Antioco. Reed had the chutzpah to propose to them that we run their brand online and that they run [our] brand in the stores and they just about laughed us out of their office. At least initially, they thought we were a very small niche business.

We already know how this one ends. Since passing up on partnering up with Netflix, Blockbuster went bankrupt in 2013. One final twist? That bankruptcy came despite attempts to bolster the company in 2008 by purchasing Circuit City. In fact, Circuit City went bankrupt in 2009 before the deal could be closed…

New Coke

Coca-Cola

Coca Cola didn’t take the decision to introduce New Coke lightly. Before bringing out a revised version of their formula, known as New Coke, in 1985 the company Coca Cola conducted two years worth of market research and spent $4 million on over 200,000 blind taste tests that pitted New Coke against both Pepsi and old Coke.

The research found that consumers preferred the taste of New Coke to that of any other beverage on the market. However, New Coke lasted just shy of three months before Coca Cola was forced to pull the product from the shelves. Whether it was the packaging or the sweet taste that some found sickly, the New Coke experiment was declared a failure and classic Coke was reintroduced.

Strangely, New Coke was still a success in some respects; before the venture, Coke had steadily been losing ground to Pepsi. The media attention from the New Coke debacle, coupled with relief from classic Coke drinkers, actually led to a rise in sales in the years to come.

$10 Million On The Denver Broncos

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Although there were a few big topics of conversation the day after the last Super Bowl Sunday, one of the biggest was a rumour that Floyd Mayweather bet $10 million on the Denver Broncos and lost it all. With a net worth of around £120 million, that’s a heck of a chunk of change to lose in one sitting! But the story doesn’t end there…

After the game, Floyd took to Instagram to claim that he hadn’t placed any bets on the game at all and that the whole thing was nothing but a rumour. Still, you have to wonder why he didn’t clarify that before the game started! Weirdly enough, this isn’t even the first time Mayweather has been at the centre of a gambling story – in 2013, the media reported that he had bet $5.9 million on one of the Miami Heat’s playoff games!

Just in case this one’s a bust, here are some more of the biggest bets in history.

Google’s Masseuse

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After divorcing from her husband in 1999, Bonnie Brown moved in with her sister. She applied to a job ad for an in-house masseuse at a Silicon Valley startup with 40 employees. The company offered her $450 a week to start right away, and threw in a few stock options. Brown didn’t know much about the stock market, but was still glad to have them.

The startup? Google. After five years with the company, Brown was able to retire after selling some of her stock for several million dollars. She held on to the rest in case of, in her words, a rainy day. Each share she has today is worth around $500, more than her weekly starting salary!

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