Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.
What Happened? On this day in 1957, Ford Motor Company (NYSE:F) unveiled the Edsel.
Where The Market Was: The Dow Jones Industrial Average closed at 477.55 and the S&P 500 traded at 44.61.
What Else Was Going On In The World? In 1957, The Soviet Union launched the first ever artificial satellite into space, the Sputnik I. In the U.S., toy company Wham-O released the first ever frisbee toy. Average monthly rent was $90.
Ford’s Biggest Flop: The Edsel is infamous as Ford’s costliest mistake in history. Experts estimate the Edsel cost Ford roughly $350 million ($2.3 billion in 2016 dollars) in losses, or roughly $3,200 per vehicle sold.
The Edsel had such a negative impact on Ford’s finances that the company’s net income per share dropped from $5.40 in 1957 to just $2.12 in 1958. Ford also cut its dividend from $2.40 to $2.00 to mitigate the Edsel’s impact on its balance sheet. Ford’s share price itself dropped from above $60 to below $40.
Experts cite a U.S. economic recession, the Edsel’s unappealing name, poor marketing, unreliability, unappealing design and another of potential explanations for the car’s poor performance in the market. Whatever the reason, Ford discontinued the Edsel in 1959, just two years after its launch.