Inventing the Modern World


On this day in economic and financial history...

One of the most successful accidents in history happened on this day in 1928. Alexander Fleming, returning to his lab on the morning of Sept. 28, 1928, found a petri dish of bacteria contaminated with mold -- the first instance of modern antibiotics. He named the compound that resulted from further research "penicillin."

It would be years before the discovery could be commercialized. The first dose, manufactured by Merck (NYS: MRK) , would not be given to a patient in the United States until 1942. Its success led to a deluge of production -- by the end of 1943, 21 billion units had been produced (about 4.2 million times the dosage given to the first patient).

A single share of Merck stock, bought on Sept. 28, 1942 for about $26, has grown in value to become worth nearly $62,000 spread out over nearly 1,400 shares, not accounting for any reinvested dividends. Pfizer (NYS: PFE) , which went public in June of 1942, began mass-producing penicillin in 1944 with a great deal of those supplies destined for D-Day soldiers that same year. Its current market cap is 15,000 times larger than its post-IPO market cap of $12.4 million.

A bit more than 15 minutes of fame
The first color televisions were sold to the public beginning on Sept. 28, 1951. The sets were manufactured by CBS, but production came to a halt the next month following an edict from the Defense Mobilization Program, which demanded the availability of scarce resources as Korean War efforts scaled up.

There were 12 million TV sets in the United States at the end of 1951. By 1955, half of American homes had a TV. That year, Billboard reported total television broadcasting industry revenues of $745 million. Color TV wouldn't find a place in half of American homes until 1972, at which point industry revenues had grown to $4.6 billion.

Today, the global TV broadcast industry (including cable) generates about $375 billion in revenue each year, with about $90 billion of that flowing to American industry players. Approximately 239 million TVs should ship worldwide by the end of this year.

Impacts on the Dow
There were no drugmakers in the Dow Jones Industrial Average (INDEX: ^DJI) until Merck joined the index in 1979. Pfizer joined in 2004, following Johnson & Johnson's (NYS: JNJ) 1997 initiation. Though many film-focused media companies have been part of the Dow over the years, only Disney (NYS: DIS) among all past or present Dow inclusions has made the majority of its revenue (and profit) from television while part of the index. These four companies now comprise about 11% of the Dow's total value.

Penicillin and television have changed the world in ways that can't be fully quantified, but they've affected shareholders in the above companies in profoundly positive ways. The next great innovation might be about to explode into the public consciousness, bringing changes as profound as penicillin or television. To find out more about the technology behind what's been called "The New Industrial Revolution" and the three companies leading the way, click here for a free report that just might change your life.

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