Was ever a successful person ever so ill used? Allan A Ryan ran a well-regarded investment house on Wall Street in the late Teens and early Twenties. He was known as a major Bull.
Bulls make a lot of people money, but the risk is, high prices can come down for myriad reasons; then everyone accuses the Bulls of being manipulators.
It works the other way as well, if someone bets against the market, a Bear, they profit on people’s losses. The public tends to be annoyed with Bears – it’s like a Craps table – when the pretty girl is rolling the point over and over everyone wins and celebrates. However when the crabby old guy bets against her, the table tends to complain about jinxing.
Ryan supported many well-performing stocks. but his pet stock was Stutz Motor Company makers of the sexy Bearcat – one of the coolest cars ever built. He held so much, he eventually became the President of the company. Stutz wasn’t even very rich, as stock issues go, but people loved this car so much they bought stock in it.
In the Bull Market of post-war demand, Stutz climbed from 40 to 144. Then Bears started to get into the campsite which resulted in depressing stock prices, but Stutz held firm – a share sat at 100. Suddenly, though, Ryan saw his stock’s price slip for no apparent reason. He figured it to be a Bear Raid.
A Bear Raid is a group of investors combining to spread negative rumors about a stock and selling short to drive it down ASAP; which they plan to cover once the stock plummets.
His holdings would soon be worthless. He sprang into action and starting buying every Stutz share out there. Soon he had ALL of Stutz – he cornered it. Incredibly, after a few months, he had helped pump the stock to 391. He borrowed millions to buy more stock and kept giving the Shorts as much stock as they wanted. They would have to cover eventually, or possibly face prison time for Breach of Contract. As manipulator Daniel Drew famously posited ‘He that sells what isn’t his’n; must buy it back or go to pris’n.’
The Shorts, sure of easy pickings on Stutz were Bear-trapped – they had to replace the borrowed stocks, but there weren’t any. Allan A Ryan then announced he would sell the shorts all the Stutz they needed … at 750! He shrewdly outsmarted those that would undermine his business. The problem was – many of the Shorts were actually members of the Board of Governors of the Stock Exchange itself. They blithely changed the rules, threw Stutz off the board, and refused to honor their short obligations.
When asked at a press conference how the Board could do such things, the answer was ‘The Board can do what it wants.”
Ryan was bankrupt in a few years. His father, the powerful Thomas Fortune Ryan – tobacco magnate, owner of Royal Typewriter – refused to help his son as they hated each other. When Thomas died he willed his son a set of pearl shirt studs.
This story is dramatically portrayed in our book ‘Speaker of the Street.’