The Motley Fool: History, Expansion, Legislative Efforts

The Motley Fool, based in Alexandria, Virginia, is a private financial and investment advisory firm. David Gardner and Tom Gardner, co-chairmen and brothers, and Erik Rydholm, who has since left the company, founded it in July 1993. Over 300 people work for the company around the world.

Name of the business

Shakespeare’s comedy As You Like It inspired the name “Motley Fool.” It alludes to the only character in the story – the court jester – who could tell the Duke the truth without losing his head.

History (Motley Fool Early Years)

The Motley Fool published a series of messages on the internet in 1994 promoting a fictitious sewage-disposal company. The messages, which were intended to teach a lesson about penny stock investing as an April Fool’s joke, received widespread attention, including coverage in The Wall Street Journal. The Gardners turned their one-year-old investment newsletter into a content partnership with America Online in August of that year (AOL). [7] They were featured in the New Yorker’s “Talk of the Town” section in December.

David and Tom Gardner published The Motley Fool Investment Guide in 1996, which made the New York Times and Bloomberg Businessweek bestseller lists.

The book sparked debate; Bloomberg described The Motley Fool as having a “Fanatical following,” while a PBS Frontline episode described the company as consisting of “20-somethings” providing “so-called advice.”

The Motley Fool’s online presence shifted from AOL to its own domain,, in 1997, where it continued to offer investing advice while relying on advertising revenue.

Dot-com bust and the “Foolish Four”

Jason Zweig chastised the Motley Fool in 1999 for its “Foolish Four” investment theory. This concept was pitched as a way to “crush mutual funds [in] only 15 minutes a year” by employing a mathematical formula to identify stocks that would grow much faster than the market average. The Foolish Four method “turned out to be not nearly as wonderful a strategy as we thought,” according to Ann Coleman of the Motley Fool in 2000.

During the dot-com bubble and subsequent market crash of 2001, the company laid off 80 percent of its workforce in three rounds. It also shut down operations in Germany and Japan, which were later reopened.


With the launch of its first subscription service for investment advice in April 2002, The Motley Fool transitioned to a subscription-based business model. The company launched its Stock Advisor program, which provides subscribers with monthly stock picks and premium investment education.

In addition, the company launched free and subscription-based businesses in a number of countries. The Motley Fool is based in the United Kingdom, Australia, Canada, Germany, and Japan as of 2019. The company announced in October 2019 that it was ceasing operations in Singapore. In October 2020, the company announced that it would also be ceasing operations in Hong Kong a year later.

In August 2018, the company launched The Ascent, a personal finance sub-brand that offers free educational resources and product reviews.

The Motley Fool launched two more sub-brands in September 2019. Millionacres offers real estate investing advice and resources via a subscription model.

The Motley Fool launched its own app, Investor Island, on September 17, 2019. Investor Island is an investing-themed real-time strategy board game. On the internet, players compete to destroy each other’s bases and gain monopoly. Players collect stocks that reflect real market data and receive money based on previous stock market actions.

After playing the game, the Motley Fools claim that “everyone might just learn a little about the power of investing in the stock market.” Investor Island is available on the App Store for iOS devices.

Legislative initiatives

The Motley Fool’s representatives testified before Congress in opposition to mutual fund fees, in support of fair financial disclosure, and on the Enron debacle and the IPO process.

Regulation Fair Disclosure, proposed by the Securities and Exchange Commission in 1999, would require companies to provide important information to Wall Street analysts and the general public at the same time. Bill Barker, a contributor to the Motley Fool, wrote an article in December 1999 encouraging readers to leave comments on the Securities and Exchange Commission’s website. [After the regulation was passed, former SEC chairman Arthur Levitt was quoted in The Wall Street Journal on July 2, 2001, saying, “We received two-thirds of our letters from Fools. Reg FD would not have happened if it hadn’t been for them.”

For Further Reading:

Stock: Understanding Stocks And Bonds

Review: Using Motley Fool Stock Advisor to Beat the Market

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