A C on His Econ Paper Built FedEx. 50 Years Later, Wall Street Just Gave the Company an F

If someone tells you your business idea or investing strategy is dumb, they’re probably doing you a favor. (What, you thought I was gonna say, “Follow your dreams”? This isn’t LinkedIn.) Seriously, most ideas are dumb… it’s just a fact. But every once in a while (on the rare occasion when the brain fires on all cylinders instead of short-circuiting) you get something like FedEx.

Back in 1965, a 21-year-old Yale student named Fred Smith scribbled down an idea in an economics paper. His pitch was an “integrated air-to-ground overnight delivery system.” Which, in plain English, meant: what if there was a way to send a package across the country and have it actually show up the next day? Crazy, right? His professor thought so too. Smith got a “C” on the paper. Probably with a note that said something like, “Cool fantasy. Now let’s talk about how railroads work.” But Fred didn’t let a mediocre grade kill the idea. He went on to serve in the Marine Corps (Vietnam vet, Bronze Star, Purple Heart… guy was not soft), and came back ready to build the impossible.

In 1973, he launched Federal Express with a $4 million inheritance from his dad and raised another $91 million in venture capital ($630 million by today’s standards, you can thank the Fed for that). On its very first night, FedEx delivered 186 packages to 25 cities using just 14 Dassault Falcon jets.

(Source: Fedex)

And it didn’t go smoothly. At one point, FedEx was so broke that Smith flew to Vegas, played blackjack with the company’s last $5,000, and won enough to cover fuel costs to keep planes in the air. Absolute menace.

Fast forward 50 years, and that C-grade paper is now a $60 billion global logistics powerhouse. Fred Smith died last week at 80, leaving behind a legacy built on stubbornness, putting it all on the line, and a deep understanding that “overnight” actually wasn’t a bad idea. Unfortunately, Wall Street just graded FedEx’s latest earnings like that same econ professor.

Last night, FedEx reported Q4 earnings of $6.07 per share… up 12% year-over-year and higher than the $5.81 analysts expected. Revenue came in at $22.2 billion, also beating the $21.75 billion estimate. It really wasn’t bad on the surface (just blame tariffs and everyone being broke in this economy, right?).

But here’s where things got testy. The company projected Q1 earnings between $3.40 and $4.00 a share, but Wall Street was expecting $4.03. Now, missing earnings by a few pennies isn’t usually a disaster. But this wasn’t a normal miss… it was a range miss. FedEx said, “Here’s our best-case scenario,” and even that didn’t clear the lowest bar analysts set.

And remember, this isn’t a new tech penny stock managing expectations. This is FedEx. A 50-year-old, Fortune 500 global shipping monster. When they say they’re not confident about hitting the mark, the market listens… and runs for cover.

Then came the real smack in the face… for the first time in 13 years, FedEx didn’t provide a full-year outlook. No revenue targets. No earnings goals. Just a vague wave at “macroeconomic uncertainty”... mainly tied to a $170 million hit to international exports, especially in the ever-glitchy Trans-Pacific lane. CFO John Dietrich said guidance would return “when visibility improves,” what he really meant was “flip a coin, we don’t know either.”

As you can imagine, the market didn’t love that. Today shares are down 3%, dragging the stock down roughly 19% YTD. Investors don’t want to hear “we feel good about the future” while the ship’s taking on water. Morgan Stanley’s Ravi Shanker said it best: show us the damn course correction.

To FedEx’s credit, they’re not asleep at the wheel. The company’s deep in a cost-cutting phase… consolidating Express, Ground, and Services into one operating unit and prepping FedEx Freight for a spin-off within 18 months. But the tone feels more like “bracing for turbulence” than “charting a bold new flight path.”

So yeah… most ideas are dumb. But once in a while, someone gets a “C” in econ class and ends up building a multibillion-dollar empire, saving it with blackjack winnings, and inventing the logistics infrastructure for an entire generation.

You? You might just end up overleveraged, underfunded, and pitching your crypto app to your mom’s bridge club. But give it a shot. Because you never know what might actually take off. (Literally.)

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.