I have been talking about the early 1970s and what a historic time it was for the community and Winnebago Industries.
I mentioned Winnebago (WGO) was first listed on the New York Stock Exchange (NYSE) in 1970 and I believe it was the largest percentage climber on the NYSE in 1971. (I don't know how many stocks were listed on the NYSE in 1971--there are about 2,800 today--but I think you can see how truly unimaginable this was for a newly listed company in little Forest City, Iowa.)
In the Guinness Book of World Records, it was stated an early $1,000 investment in WGO stock had turned into $1 million. I remember John K. telling me in the early years when Winnebago sometimes had cash flow issues and some local merchants wondered if Winnebago would ever pay its bill, he went to many of them and gave them the option of being paid with WGO stock or with cash. He said most of them took cash and virtually left fortunes on the table by not taking the stock which would eventually increase in value at a pace no one could have imagined.
In early to mid-1972, things were wild in Forest City and, almost in a way mythical. The WGO stock price was posted all over town and it seemed to move only in one direction--up, up, up. Norm Stromer's Wittenstein brokerage office (located about mid-way between the Summit building and the Cooper building) seemed at times to be as busy as Grand Central Station. Virtually everyone there was a client of Norm and owned some WGO stock. How much higher would it go? It got very close to $100 a share. In mid-1972 there was a 2 for 1 stock when the stock was in the $90 range taking it to the $45 range.
An article would later be published in Playboy magazine titled "Oh, Little Town of Millionaires.” There was a lot said in that article about the excitement and euphoria within the Wittenstein office.
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The article speculated there were more millionaires per capita in Forest City than in any other similarly-sized city in America as a result of the Winnebago stock boom creating 25 to 35 new millionaires.
I don’t know if that is a correct number but indeed there were many.
Surprisingly, very few people were selling as it seemed to be the general consensus the stock would just keep going up. But they were about to learn the recreational vehicle industry is very volatile and good news could rather quickly turn to bad news.
After the stock split the stock started to decline and reached $22 by the fall of 1972. And then came the oil embargo and a recession and the stock eventually made it all the way down, down to the $3 area as it would again several times through the years when the company suffered other downturns.
Well, most of those “paper millionaires” held on and even margined their position only to see their stock pulled away by margin calls. So, in large part, the Little Town of Millionaires became the Little Town of Former Millionaires.