Major Investments Shift
The Trust was valued at $1.9 billion in January, 1996. The St. Joe Company was originally owned by the DuPont Trust. After the company went public, the duPont trust owned 70% of the 30.6 million shares outstanding. The company’s stock did well, rising from 53⅝ in February, 1995 to 115½ in December, 1997. The corresponding trust value increased from $1.1 billion to $2.4 billion. The problem was that DuPont’s will stipulated an annual disbursement of the amount equal to 3% of the trust’s value. St. Joe's annual dividend of 20¢ only generated $4.26 million and the required payout was over $72 million, so the trust was forced to sell 4 million shares to invest in a security producing substantially more income than St. Joe. That left a 57% stake, which was reduced by additional stock sales to 23%. On May 28, 2004, the trust filed paperwork to divest as many as 12 million more shares, leaving an 8% ownership. On October 9, 2000, St. Joe divested its 54% interest in Florida East Coast Industries by distributing FECI Class B common shares to St. Joe shareholders; the DuPont Trust received a large block of FECI stock.
A new Chief Investment Officer was hired in 2000 to manage the trust's portfolio. David Gonino proposed a new investment policy and the board approved it: the trust would not own more than 5% of any company, and no single investment could account for more than 5% of the trust's value.
Read more about this topic: Alfred I. Du Pont Testamentary Trust
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