Clarence Saunders lost Piggly Wiggly trying to corner its own stock

Clarence Saunders opened the first Piggly Wiggly in Memphis in 1916 and revolutionized retail. His store was the first self-service grocery: customers walked through a turnstile, picked items from open shelves, paid at a front checkout, and carried purchases in a shopping basket. The format was wildly successful. By 1922, Piggly Wiggly had 1,268 franchised stores across the United States and had made Saunders a wealthy man.

In late 1922, bear raiders — including Merrill Lynch — began shorting Piggly Wiggly stock, betting that shares would fall. Saunders, confident in his company and furious at what he saw as manipulation, decided to fight back. He borrowed $10 million from Southern banks and secretly bought nearly all of the outstanding shares. By March 20, 1923, he controlled 196,000 of the 200,000 shares, driving the price from $39 to $124. The short sellers appeared trapped.

The New York Stock Exchange, however, refused to let the corner stand. It declared that a corner had been created and gave the short sellers five extra days to deliver stock — time enough to find the few remaining shares. When the exchange reopened, the price collapsed. Saunders was left holding borrowed shares worth a fraction of what he had paid. He owed $2.5 million by September. He resigned as president and turned over every asset he owned.