Frederick Jace
You may be interested to know that there have been numerous mergers and acquisition deals between companies that happen for an insanely low price, like for one dollar.
Many times when a company takes on too much debt and other liabilities, they will opt to sell their business to get out of paying those liabilities. It would then fall onto the company that just bought them, which is why many times companies with a lot of liabilities and debts will sell themselves for what looks like a ridiculously low price.
In this article, we’re going to be covering X of these deals that ended up becoming extremely profitable for the company buying the other company. Surprisingly or maybe not surprisingly, there aren’t a lot of examples of a company that was sold for $1 being turned around into a multi million dollar business, but we will go over all the examples we could find!
For starters, this Los Angeles Business Journal article mentions how an individual was able to buy a company for $1, taking on millions of dollars in liabilities, then ultimately turning the business around to sell it for a profit.
- Newsweek
After a few years of consecutive financial losses after the 2008 financial recession, Newsweek was sold to audio pioneer Sidney Harman in 2010 for just $1. Of course, he would also be taking on a staggering $47 million dollars in liabilities that were associated with the company.
Following years of company restructuring, redesigns, mergers, and huge changes, Newsweek would begin to profit and make tens of millions of dollars in revenue each year. Their peak revenue, according to Zippia, was $44.4 million in 2022.
The company was originally founded in 1933 as News-Week by former news editor of Time magazine, Thomas J. C. Martyn. He got financial backing from several large U.S. stockholders including Ward Cheney, John Hay Whitney, and Paul Mellon. They invented a sum of around $2.5 million, which in today’s dollars is $56.52 million.
Washington Post purchased Newsweek in 1961 and owned the company until Sidney Harman bought it for that $1 dollar price point in 2010.
- Chelsea Football Club
In the early 1980s, Chelsea was facing financial ruin as they were facing a very difficult battle with property developers looking to evict the club from their London stadium.
During the 1980’s, Chelsea had been playing in the second tier of English football leagues, hitting record lows for the club.
In 1982, Chelsea was sold to Ken Bates for just £1 after the club was facing an almost certain eviction from the grounds their stadium was on, and as they were close to being relegated down to the third division in English football.
In 1983, Chelsea won the Second division title and were promoted to the Premier League. They managed to stay there for a few seasons before being dropped back down in 1988, but would immediately be promoted the following season after winning the Second Division championship again.
Bates secured the stadium grounds for his football club in 1992 after making a deal with the bankers of the property developers, who went bankrupt due to a market crash. By this time, Chelsea was seeing investments and loans, such as a £26 million dollar loan from Chelsea fan and businessman Matthew Harding to renovate the stadium and sign new players.
Chelsea would win the League Cup, UEFA Cup Winners’ Cup, and the UEFA Super Cup all in 1998, and then the FA Cup in 2000. Chelsea would also reach the Champions League after qualifying in the 2002-2003 season.
However, somewhat unexpedectly, after yet another financial crisis facing Chelsea, Bates decided to sell the club for £60 million, and he reported a profit of £17 million. Not bad for a £1 purchase.
- Chevrolet
Okay, this one is a bit of a stretch.
Chevrolet was sold to General Motors in 1917 for just $10 USD… and $2 million in GM stock. It is interesting, however, that the $10 was even included in the deal, and the reason for it to be included was so that the transaction would be formally recognized as a transaction.
In today’s dollars, $10 USD is $238.4, and the $2 million in GM stock at cash value today would be worth $47 million, not accounting for changes in the stock price.
If you’re interested to learn more about the various companies that have been sold for $1 or a ridiculously sounding price, then check out this article from Yahoo Finance.
