Daniel Drew
Daniel Drew was an American businessman, steamship and railroad developer, and financier. Summarizing his life, Henry Clews wrote: "Of all the great operators of Wall Street... Daniel Drew furnishes the most remarkable instance of immense and long-continued success, followed …
Full Answer
What is watered stock?
Aug 25, 2021 · Watered stock is an illegal scheme to defraud investors by offering shares at deceptively high prices. Watered stock is issued at a higher value than it is actually worth; it is accomplished by...
What is the origin of the term'stock watering'?
watered stock n. shares of stock of a corporation which have been issued at a price far greater than true value. In this case, the actual value of all shares is less than the value carried on the books of the corporation.
Are there any stocks in the water business?
watered stock. Stock that is issued with a value considerably in excess of the value of the assets that support it. The term may be derived from the practice of feeding cattle salt to induce them to drink large amounts of water just before they are sold, thereby increasing their weight. Thus, the buyer—whether of stock or of livestock—pays ...
Do water stocks pay dividends?
STOCKHOLDER A person who owns shares of stock in a corporation or Joint-stock company. See Mills…. OVERISSUE To issue in excessive quantity ; to issue in excess of fixed legal limits. Thus,…. CAPITAL STOCK The common stock or fund of a corporation. The sum of money raised by the….
What is meant by watered stock?
Definition. Stock that is sold with a face value that is much greater then its actual (market) value. While watered stock may appear to be a good value, due to corporation laws, the stock holder may be exposed to liability up to the face value (rather then having their liability limited to the price paid).
Why is it called watered stock?
The term comes from cattle ranching, where ranchers forced cattle to drink an excessive amount of water in order to sell them immediately thereafter at a weight-based price.Dec 24, 2021
What was watering down the stock?
Watered-down stocks Between 1866-1868, Daniel Drew conspired with James Fisk and Jay Gould, whom he brought on the board, to issue spurious Erie Railroad shares, thus "watering down" the stock, of which unsuspecting Cornelius Vanderbilt bought a large quantity.
How do you water down stocks?
Share dilution is when a company issues additional stock, reducing the ownership proportion of a current shareholder. Shares can be diluted through a conversion by holders of optionable securities, secondary offerings to raise additional capital, or offering new shares in exchange for acquisitions or services.
Is watered stock illegal?
As correctly argued by the CRMD, insufficient or partial consideration leads to watered stock which is prohibited by law.
What is the general purpose of receiving water stock as part of their real estate ownership?
New owners will receive a water stock certificate which entitles them to receive water service and gives the shareholder certain rights and privileges regarding the operation of the company. When a change in property ownership occurs, the water stock must be transferred to the new owner.
How old was Rockefeller when he invested $4000 to buy his first refinery?
In 1863, at just 24, he invests everything into his first refinery. By 27, he's on the verge of bankruptcy. To not only survive, but thrive, he agrees to meet with the rail road magnate Vanderbilt, hoping to secure competitive transport rates. But Rockefeller narrowly misses his 6:25am train to New York.
Was Jay Gould a philanthropist?
Unlike other wealthy industrialists of the era, the tightfisted Jay Gould did not pursue philanthropic efforts, neither in his own lifetime nor through his death.
How did Daniel Drew make his money?
Drew began his business career by buying cattle and sheep in New England and the Midwest and selling them to butchers in New York City. He received some financial assistance from a wealthy businessman, Henry Astor. Drew, however, quickly gained a reputation on his own as a sharp dealer.May 29, 2018
How do you avoid stock dilutions?
How to avoid share dilutionIssuing options over a specific individual's shares. ... Issuing options over treasury shares. ... Issuing unapproved options. ... Creating bespoke Articles of Association.Nov 19, 2020
How does dilution affect stock price?
Dilution usually corresponds with a decrease in stock price. The greater the dilution, the more potential there is for the stock price to drop. Dilution can keep stock prices lower even if a company's market capitalization (the total value of its outstanding shares) increases.Sep 9, 2020
Why do firms buy back shares?
The main reason companies buy back their own stock is to create value for their shareholders. In this case, value means a rising share price. Here's how it works: Whenever there's demand for a company's shares, the price of the stock rises.Mar 9, 2022
Why is a stock overvalued?
An overvalued stock. A stock may be overvalued for any number of reasons; speculation and over- issue are only two of the most common. Watered stocks are often subject to a price correction.
What is stock ownership?
A stock representing ownership in a corporation that is worth less than the actual invested capital, resulting in problems of low liquidity, inadequate return on investment, and low market value.
What is watered stock?
Watered stock is an asset with an artificially- inflated value. The term most commonly refers to a form of securities fraud in which a company issues stock to someone before receiving at least the par value in payment.
Who defrauded Cornelius Vanderbilt?
Examples. In 1866–1868, during the so-called Erie War, Cornelius Vanderbilt was defrauded by James Fisk, Daniel Drew and Jay Gould, who sold $7,000,000 worth of watered stock to him in his attempt to acquire the Erie Railroad.
What is stock watering?
"Stock watering" was originally a method used to increase the weight of livestock before sale. The cattle were first given salt to make them thirsty, then allowed to drink their fill of water. The term's introduction to the New York financial district is popularly credited to Daniel Drew, a cattle driver turned financier.
Who criticized the practice of watered stock?
The practice of watered stock was sharply criticized by members of the Social Gospel movement such as George D. Herron and Walter Rauschenbusch. For example, in 1898, Herron said "watered stock is a method of high treason by which corporations forcibly tax the nation for private profit, and by which they annually extort millions from American toilers and producers. It is... essentially a system of violence, spoil, and robbery."
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American Water Works
American Water Works may be one of the best examples of how boring stocks can quietly crush the market. Founded in 1886, the water utility went public at $21.50 a share in 2008 and was approaching $200 a share in August 2021.
York Water Company
York Water Company is the oldest investor-owned water utility in the country, dating back to 1816. The company operates within three counties in south-central Pennsylvania by sourcing, purifying, and distributing drinking water, and it also owns two wastewater collection systems and five wastewater collection and treatment facilities.
Essential Utilities
Essential Utilities, formerly known as Aqua America, is a water and natural gas utility that serves around 5 million people under the Aqua and Peoples brands.
American States Water Company
American States Water Company is a diversified utility company with several subsidiaries and three segments, including water, electric and contracted services.
Middlesex Water Company
Middlesex Water Company was founded in 1897 and operates regulated water and wastewater utility systems in New Jersey and Delaware. It has approximately 115,000 customers across those two states.
Xylem
Xylem isn't a water utility but a water technology company. It makes a wide range of products to handle the transportation and treatment of water, pumping and heating, and measurement for meters and data analytics.
What is Middlesex Water Company?
Middlesex Water Company owns and operates regulated water utility and wastewater systems. It operates in two segments, Regulated and Non-Regulated. The Regulated segment collects, treats, and distributes water on a retail and wholesale basis to residential, commercial, industrial, and fire protection customers in parts of New Jersey, Delaware, and Pennsylvania.
How many states does American Water Works serve?
American Water Works Company, Inc. , through its subsidiaries, provides water and wastewater services in the United States. It offers water and wastewater services to approximately 1,700 communities in 16 states serving approximately 3.
Where is Global Water Resources located?
, a water resource management company, owns, operates, and manages regulated water, wastewater, and recycled water utilities primarily in metropolitan Phoenix, Arizona. As of December 31, 2020, it served approximately 66,000 people in 24,000 homes.
What is California Water Service Group?
California Water Service Group, through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, and Hawaii. It is involved in the production, purchase, storage, treatment, testing, distribution, and sale of water for domestic, industrial, public, and irrigation uses, as well as for fire protection. The company offers its services to approximately 492,600 customer connections in 100 California communities; approximately 5,300 water and wastewater customer connections on the islands of Maui and Hawaii; approximately 36,600 customer connections in the Tacoma, Olympia, Graham, Spanaway, Puyallup, and Gig Harbor areas; and approximately 8,500 water and wastewater customer connections in the Belen, Los Lunas, Indian Hills, and Elephant Butte areas in New Mexico.
How many gallons of water does York Water Company hold?
It owns and operates two wastewater collection systems; five wastewater collection and treatment systems; and two reservoirs, including Lake Williams and Lake Redman, which hold approximately 2. 2 billion gallons of water.
What is WTRG water?
Essential Utilities (WTRG) Essential Utilities , Inc. , through its subsidiaries, operates regulated utilities that provide water, wastewater, or natural gas services in the United States. It offers water services through operating and maintenance contracts with municipal authorities and other parties.
What is American States Water Company?
American States Water Company, through its subsidiaries, provides water and electric services to residential, commercial, industrial, and other customers in the United States. It operates through three segments: Water, Electric, and Contracted Services. The company purchases, produces, distributes, and sells water, as well as distributes electricity.
Is water a commodity?
Water is one of the basic necessities of human life. Life as we know it cannot exist without water. For this simple reason, water may be the most valuable commodity on Earth. It is only natural for investors to consider purchasing shares of the companies involved in water.
Is Essential Utilities a publicly traded company?
Essential Utilities is the second-largest publicly traded water utility in the U.S., serving approximately 5 million customers across 10 states. The company has raised its dividend for 29 consecutive years, which qualifies it to be a member of the Dividend Champions list.
Is California water service public or private?
California Water Service is the 4th-largest publicly-owned water utility in the United States. The company has six subsidiaries that provide water to about 2 million people, mainly in California, with some additional operations in Washington, New Mexico, and Hawaii.
Is American States Water a utility company?
American States Water is a utility company with two business units: Utilities (primarily water, some electricity) and Services (wastewater services on several US military bases). American States Water is based in California, where it operates its utility business. The company’s services unit spans several US states. American States Water is also a Dividend King, having raised its dividend for 66 consecutive years.
Is water a good investment?
Water could be one of the biggest investing themes over the next several decades. An increasing global population is only going to cause demand for water to rise in the future. And, given the fact that water is a necessity of human life, demand for water should hold up extremely well, even during the worst recessions. Therefore, investors with a longer time horizon such as Millennials should consider water stocks.
Overview
Origin of term
"Stock watering" was originally a method used to increase the weight of livestock before sale. The cattle were first given salt to make them thirsty, then allowed to drink their fill of water. The term's introduction to the New York financial district is popularly credited to Daniel Drew, a cattle driver turned financier.
Explanation
American stock promoters in the late 1800s could inflate their claims about a company's assets and profitability, and sell stocks and bonds in excess of the company's actual value. To do so, they would contribute property to a new corporation in return for stock at an inflated par value. On the balance sheet, the property would be the corporation's only capital, and because legal capital wa…
Examples
• In 1866–1868, during the so-called Erie War, Cornelius Vanderbilt was defrauded by James Fisk, Daniel Drew and Jay Gould, who sold $7,000,000 worth of watered stock to him in his attempt to acquire the Erie Railroad.
• In 1873, the Railway Commissioners of Illinois reported that the stock of the railway companies in the state was inflated to $75,000,000, bringing $6,000,000 in yearly profits. In particular, the investigation uncovered that 75% of the Central Pacific Company's assu…
Criticism
The practice of watered stock was sharply criticized by members of the Social Gospel movement such as George D. Herron and Walter Rauschenbusch. For example, in 1898, Herron said "watered stock is a method of high treason by which corporations forcibly tax the nation for private profit, and by which they annually extort millions from American toilers and producers. It is... essentially a system of violence, spoil, and robbery."
See also
• David Dodd
• Daniel Drew
• Counterfeiting