What Do Burritos, Oil, and Spreadsheets Have in Common?

On this day in economic and financial history ...

The original killer app
Spreadsheets have had an important but vastly underappreciated role in computing history. Apple (NASDAQ: AAPL  ) wouldn't have enjoyed as many early sales of the Apple IIs if not for VisiCalc, the first personal computer "killer app" that made the machine a must-have for thousands of finance and accounting pros. But as the spreadsheet brought many customers to Apple, so, too, did it take them away, particularly after Jan. 26, 1983, when Lotus 1-2-3 was first released for the IBM (NYSE: IBM  ) PC.

Created by a friend of VisiCalc's developers, Lotus 1-2-3 quickly rocketed to the lead over the Apple spreadsheet. Because of its heavy use of memory, Lotus 1-2-3 also pushed PC makers to add more RAM capacity. However, competition from Microsoft was fierce -- Lotus had displaced Microsoft's Multiplan spreadsheet on its release -- and the first release of Excel in conjunction with Windows 2.x in 1987 marked the beginning of Microsoft's rise as a business-software provider at Lotus' expense. By this point, the IBM PC platform had long since displaced Apple (and any other competitor) as the leading choice among consumers and businesses. Lotus 1-2-3 had done its work admirably.

Lotus lost out to Microsoft by the time Windows 95 arrived, but that didn't stop IBM from launching a hostile takeover in 1995. The company that made IBM a PC leader was subsumed into Big Blue for $3.5 billion, and it now exists only as a smallish software division, lacking any clear leadership position in any of its market niches.

Stepping up
On Jan. 26, 1950, Coca-Cola (NYSE: KO  ) finally graduated to the Big Board by taking a place on the New York Stock Exchange. For the year that had just completed, Coca-Cola had earned $8.2 million and boasted a market cap of $224 million. Each of the company's approximately 1.4 million shares was worth $165 at the time. Had you owned a single share of Coca-Cola when it joined the NYSE in 1950, you'd now own 1,152 shares, thanks to nine different splits undertaken since that day. That one share, worth $165, has become $42,600 -- not including the compounding power of Coca-Cola's consistent dividends.

Coca-Cola had been one of the rare non-NYSE stocks on the Dow Jones Industrial Average (DJINDICES: ^DJI  ) from 1932 to 1935, but it would not return to the index until 1987. Since that day, Coca-Cola's shares have grown 1,100%, including reinvested dividends, more than doubling the 515% return the Dow has posted over the same time frame.

A liberating oil discovery
On Jan. 26, 1931, an oil well drilled in Gregg County, Texas, revealed the true size of the East Texas oil field. The field had been drilled twice before this well began producing, but those earlier wells were many miles from the Gregg County well. Earlier oilfield discoveries, like the one at Spindletop that had ignited the Texas oil boom several decades earlier, were often relatively localized and easy to bring under the control of one primary drilling corporation. The East Texas oilfield, on the other hand, was found to be 140,000 acres in size, stretching more than 42 miles long and between 4 and 8 miles wide. This made corporate control difficult, but it created boomtowns in the regions that had tapped the earliest gushers, as workers swarmed into the area to find relief from the poverty conditions of the Great Depression.

Within two years of the Gregg County discovery, nearly 12,000 producing wells, controlled by more than 1,700 different operators, had been sunk into the East Texas oil field. That year, 216 million barrels of oil were drawn out of the sands. Since its discovery, the East Texas oil field has produced some 5.2 billion cumulative barrels of oil from more than 30,000 different wells, making it by far the largest and most productive oilfield in the lower 48 United States.

A century-plus streak ends
On Jan. 26, 1989, AT&T reported the first annual loss in its 104-year history. The telecom giant -- only a few years removed from its antitrust divestiture -- posted a $1.67 billion loss as a result of a huge $6.72 billion pre-tax writeoff, which had been taken after getting rid of obsolete equipment and 16,000 obsolete employees. The markets took this loss in stride, with shares closing unchanged for the day. Despite this flatness, AT&T's fellow Dow components had a strong enough day to push the index to a 1.1% gain. Over the following years, AT&T returned to a net loss several times -- twice in the early 1990s, and once again in the aftermath of the 2008 financial crisis. However, its shares continued to increase, and by the time the financial crisis had concluded and AT&T swung back again to a profit, it had earned shareholders a total return of nearly 400% over its price at the end of 1989.

Grilling up some spicy first-day gains
Chipotle Mexican Grill (NYSE: CMG  ) had its hotly anticipated IPO day on Jan. 26, 2006. Originally priced at $22 per share, Chipotle finished the day with an exact double, as its shares closed at $44 each. This debut was not only the largest first-day pop since late 2000, but it was also the second-largest IPO gain for any restaurant in history, trailing only Boston Market, which went public as Boston Chicken in 1993.

In its first five years as a public company, Chipotle became that rare super-IPO to justify initial enthusiasm. The company's shares became five-baggers despite enduring a deep recession than zeroed out its early gains, and net income nearly kept pace by posting total growth of 335% through the same time frame. McDonald's, which sold about a quarter of the Chipotle shares on offer in the IPO, wound up fully divesting itself of the burrito dynamo in October 2006  by exchanging 1.27 of its own shares for every Chipotle share it still held.

Chipotle's stock has been on an absolute tear since going public in 2006. Unfortunately, 2012 wasn't kind to Chipotle's stock, and investors are now wondering whether its growth has come to an end. Fool analyst Jason Moser's new premium research report analyzes the burrito maker's situation and answers the question investors are asking: Can Chipotle still grow? If you own or are thinking about buying shares in Chipotle, you'll want to click here now to get started!


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