Seabury Stanton
| Seabury Stanton | |
|---|---|
| Born |
October 9, 1892 New Bedford, Massachusetts, U.S. |
| Died |
October 19, 1971 (aged 79) Bristol County, Massachusetts, U.S. |
| Education | Harvard University |
| Occupation | Business magnate |
Seabury Stanton (October 9, 1892 – October 19, 1971) was an industrialist from New Bedford, Massachusetts who ran Berkshire Hathaway prior to its takeover by Warren Buffett in 1964.
Biography
Early life and career
Seabury Stanton was born on Oct. 9, 1892 in New Bedford, Massachusetts. His father and grandfather had been Yankee whaling captains in New Bedford. He attended the local schools, the New Bedford Textile School, and Harvard University, where he graduated in the class of 1915. The following year he married Jean Kellogg Austin (1892–1976) and began work in textile manufacturing as the treasurer for the Hathaway Manufacturing Company. Hathaway Manufacturing eventually became Berkshire Hathaway after merging with Berkshire Fine Spinning Associates in 1955, becoming the largest surviving textile manufacturer in New England with 15 mills. The company was founded in the nineteenth century with Horatio Hathaway's profits from whaling and the China Trade, but the textile industry in New England declined after World War I and didn't recover until after the Great Depression with the outbreak of World War II. In the late 1950s the industry was again in decline, facing low-cost competition from elsewhere in the United States and abroad. Stanton managed the company as president and his son Jack served as treasurer. Jack Stanton was expected to take over as president, but the Stantons were ousted before that took place. Seabury's brother, Otis Stanton, managed sales at the company and often conflicted with his brother, eventually selling his shares to Warren Buffett after a meeting at the Wamsutta Club.[1] Seabury Stanton was a miller and a manager with an overriding aim to keep the business going but he was not a financial expert and he continued to plough back most of the company’s earnings into working capital, despite ever decreasing cotton prices, resulting from increased competition at home and abroad.[2]
Ouster of Stanton by Buffett
In 1962, Warren Buffett began buying shares of Berkshire because he thought the company was selling at a discount to its actual value after noticing a pattern in the price direction of its stock whenever the company closed a mill. Eventually, Buffett acknowledged that the textile business was waning and the company's financial situation was not going to improve. In 1964, Stanton made a verbal tender offer of $111⁄2 per share for the company to buy back Buffett's shares. Buffett agreed to the deal. A few weeks later, Warren Buffett received the tender offer in writing, but the tender offer was for only $113⁄8. Buffett later admitted that this lower, undercutting offer made him angry.[3] Instead of selling at the slightly lower price, Buffett decided to buy more of the stock to take control of the company and fire Stanton.[1]
Seabury Stanton was Chairman and Director of the Northern Textile Association for many terms and an avid sailor in his free time. Stanton also published a book on Berkshire, titled "Berkshire Hathaway, Inc. A saga of courage." Stanton died on October 19, 1971 and is buried in the South Dartmouth Cemetery. [1]
Bibliography
- Stanton, Seabury (1962). Berkshire Hathaway, Inc. A saga of courage. New York: Newcomen Society in North America. ASIN B0007DUK50.
See also
References
- 1 2 3 Seabury Stanton at Find a Grave
- ↑ Livy, Julian (21 January 2013). "History of Berkshire Hathaway". Warren Buffett Secrets.
- ↑ Buffett's Worst Trade. CNBC (February 26, 2009). Retrieved on July 8, 2011.