The Motley Fool

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Motley Fool
MotleyFoollogo.png
Type of businessPrivate
Type of site
Financial advisory services
FoundedJuly 1993; 28 years ago (1993-07)
Headquarters,
Area servedUnited States, United Kingdom, Australia, Canada, Germany, Japan, Hong Kong
OwnerThe Motley Fool, LLC
Founder(s)David Gardner
Tom Gardner
Erik Rydholm
URLwww.fool.com

The Motley Fool is a private financial and investing advice company based in Alexandria, Virginia. It was founded in July 1993 by co-chairmen and brothers David Gardner and Tom Gardner, and Erik Rydholm, who has since left the company.[1] The company employs over 300 people worldwide.[2]

Company name[edit]

The name “Motley Fool” is taken from Shakespeare’s comedy As You Like It. It references the one character – the court jester – who could speak the truth to the Duke without having his head lopped off.[3][4]

History[edit]

Early years[edit]

In 1994, The Motley Fool published a series of messages online promoting a nonexistent sewage-disposal company.[5] The messages, which were an April Fool's joke designed to teach a lesson about penny stock investing, garnered widespread attention, including an article in The Wall Street Journal.[6] In August of that year, the Gardners parlayed their one-year-old investment newsletter into a content partnership with America Online (AOL).[7] In December, they were profiled in the "Talk of the Town" section of the New Yorker.[8]

In 1996, David and Tom Gardner published The Motley Fool Investment Guide, which ranked on bestseller lists for both The New York Times and Bloomberg Businessweek.[9] The book was controversial; Bloomberg wrote about The Motley Fool's "Fanatical following",[10] while a PBS Frontline episode described the company as made up of "20-somethings" giving "so-called advice".[11]

In 1997, the Motley Fool's online presence moved from AOL to its own domain, Fool.com, where it continued to provide investing advice under an advertising-based revenue model.[12]

"Foolish Four" and dot-com bust[edit]

In 1999, the Motley Fool was criticized by Jason Zweig for its "Foolish Four" investment theory.[13] This idea had been marketed as a way to "crush mutual funds [in] only 15 minutes a year" by using a mathematical formula to find stocks predicted to grow much more than average.[14][15] In 2000, Motley Fool writer Ann Coleman admitted that the Foolish Four method "turned out to be not nearly as wonderful a strategy as we thought".[16][better source needed]

During the dot-com bubble and market collapse of 2001, the company removed 80% of its staff in three rounds of layoffs.[17] It also closed its operations in Germany and Japan, which have since been reestablished.[citation needed]

Expansion[edit]

In April 2002, The Motley Fool shifted to a subscription-based business model with the launch of its first subscription service for investment advice.[18][19] The company launched their Stock Advisor program, which offers monthly stock picks and premium investment education to subscribers.[20][21][22]

The company also established free and subscription-based businesses in several countries. As of 2019, The Motley Fool has operations in the United Kingdom,[23] Australia,[24] Canada,[25] Germany,[26] and Japan.[27] In October 2019, the company announced that it was shutting down operations in Singapore.[28] A year later, in October 2020, the company announced that it was also shutting down operations in Hong Kong.[29]

In August 2018, the company launched a personal-finance sub-brand called The Ascent[30] to provide personal finance product reviews and free educational resources.

In September 2019, the Motley Fool launched two more sub-brands. Millionacres provides subscription-based real estate investing advice and real estate resources.[31][32]

On September 17, 2019, the Motley Fool launched its own app, Investor Island.[33] Investor Island is a real-time strategy board game based on investing. Players compete online to destroy each other's bases and gain a monopoly. Players collect stocks that reflect real market data and give players money based on historical actions in the stock market. The Motley Fools claims that "everyone might just learn a little about the power of investing in the stock market" after playing their game. Investor Island is available on the iOS Appstore.

Legislative efforts[edit]

Representatives of The Motley Fool have testified before Congress against mutual fund fees,[34] in support of fair financial disclosure,[35] on the collapse of Enron,[36] and the IPO process.[37]

In 1999, the Securities and Exchange Commission proposed Regulation Fair Disclosure, which would require companies to simultaneously give important information to Wall Street analysts and the public at large. In December 1999, Motley Fool author Bill Barker wrote an article telling readers to post comments on the SEC's website.[38] The regulation passed, and in the July 2, 2001, edition of The Wall Street Journal, former SEC chairman Arthur Levitt is quoted saying, "Two thirds of our letters came from Fools. Without them, Reg FD would not have happened."[39]

See also[edit]

References[edit]

  1. ^ Fool, Contributor The Daily Upside The Motley. "America is Leading the Global Economy Above And Beyond Its Pre-Pandemic Strength". www.nasdaq.com. Retrieved 2021-07-26.
  2. ^ "The Motley Fool's Competitors, Revenue, Number of Employees, Funding and Acquisitions". Owler. January 1, 2020. Archived from the original on February 3, 2020. Retrieved February 3, 2020.
  3. ^ "The Motley Fool | Exploratory Shakespeare". journeys.dartmouth.edu. Retrieved February 5, 2020.
  4. ^ O'Malley, Michael (December 12, 2019). "What the 'Best Companies to Work For' Do Differently". Harvard Business Review. ISSN 0017-8012. Retrieved February 5, 2020.
  5. ^ Gomes, Lee (May 24, 1994). "On-line Ripoffs". Chicago Tribune. Retrieved January 26, 2020.
  6. ^ Doward, Jamie (April 29, 2000). "If the jester's cap fits ..." The Guardian.
  7. ^ Kornbluth, Jesse (December 24, 1995). "Who Needs America Online?". The New York Times Magazine.
  8. ^ Kornbluth, Jesse (December 11, 1994). "What a (Motley) Fool Believes". The New Yorker.
  9. ^ "The Motley Fool Investment Guide". Goodreads. Retrieved October 1, 2018.
  10. ^ Foust, Dean (July 15, 1996). "Getting The Net To Help Build Your Portfolio". Bloomberg News.
  11. ^ "Tapes & Transcripts | 'Betting On The Market'". Frontline. PBS. Retrieved November 8, 2019.
  12. ^ Dugan, Ianthe Jeanne (July 2, 2001). "Followers of the Motley Fool Are Suffering, and Not Gladly". Wall Street Journal. ISSN 0099-9660. Retrieved February 5, 2020.
  13. ^ Zweig, Jason (June 24, 2015). "False Profits". JasonZweig.com. Retrieved October 1, 2018.
  14. ^ Graham, Benjamin (2003). The Intelligent Investor (PDF). Harper Collins. pp. 44–45. ISBN 0-06-055566-1.
  15. ^ "Investor Home - Dow 10, Foolish Four and other Dow Dividend Strategies". Investor Home. Retrieved October 1, 2018.
  16. ^ "Fool.com: Fool Four Moves On [Foolish Four] December 29, 2000". August 16, 2013. Archived from the original on August 16, 2013. Retrieved October 1, 2018.
  17. ^ "A Wake for the Motley Fools". Washington Post. February 10, 2001. ISSN 0190-8286. Retrieved October 1, 2018.
  18. ^ Flynn, Laurie J. (February 4, 2002). "Compressed Data; At Motley Fool Site, Talk Will Now Carry a Price". The New York Times. ISSN 0362-4331. Retrieved November 8, 2019.
  19. ^ McCarthy, Ellen (January 31, 2002). "Motley Fool Goes From Free to Fee". Washington Post. ISSN 0190-8286. Retrieved November 8, 2019.
  20. ^ "Motley Fool Stock Advisor Review". Day Trade Review. Day Trade Review. Retrieved May 22, 2020.
  21. ^ Trefort.net reviews of the Stock Advisor
  22. ^ MeMore, Money. "Motley Fool Stock Advisor Review". MeMoreMoney.
  23. ^ "The Motley Fool UK". Retrieved April 5, 2020.
  24. ^ "The Motley Fool Australia". Retrieved April 5, 2020.
  25. ^ "The Motley Fool Canada". Retrieved April 5, 2020.
  26. ^ "The Motley Fool Germany". Retrieved April 5, 2020.
  27. ^ "The Motley Fool Japan". Retrieved April 5, 2020.
  28. ^ Tan, Claudia (October 10, 2019). "Motley Fool ceasing Singapore operations over regulatory issues". The Business Times. Retrieved November 8, 2019.
  29. ^ "Motley Fool to close Hong Kong business due to political uncertainty". Reuters. Retrieved October 31, 2020.
  30. ^ "The Motley Fool Is 25 This Year. Here's How They Changed the Way America Invests". Washingtonian. April 1, 2019. Retrieved November 8, 2019.
  31. ^ "The Motley Fool rolls out a new company. Its focus? Real estate investing". Bizjournals.com. Retrieved November 8, 2019.
  32. ^ "Motley Fool launches real estate investing arm in Colorado". The Denver Post. September 14, 2019. Retrieved November 8, 2019.
  33. ^ Author, AppAdvice Staff. "Investor Island by The Motley Fool". AppAdvice. Retrieved May 5, 2021.
  34. ^ "Fool.com: Mutual Funds -- Costs -- Mr. Gardner Goes to Washington". zing.ncsl.nist.gov. Archived from the original on 2018-10-02. Retrieved October 1, 2018.
  35. ^ "Testimony, Sept. 13 Hearing on Auditor Independence Proposal". U. S. Securities and Exchange Commission. Retrieved October 1, 2018.
  36. ^ "Financial Collapse of Enron". C-SPAN.org. Retrieved October 1, 2018.
  37. ^ "Initial Public Offering Process". C-SPAN.org. Retrieved October 1, 2018.
  38. ^ Barker, Bill (March 21, 2000). "Fool.com: The SEC Needs Your Help (Special)". zing.ncsl.nist.gov. Retrieved October 1, 2018.
  39. ^ Dugan, Ianthe Jeanne. "Followers of the Motley Fool Are Suffering, and Not Gladly". Wall Street Journal. Retrieved October 1, 2018.

External links[edit]

Media related to The Motley Fool at Wikimedia Commons