No Cars, But . . .

The Kaiser-Frazer Corp. has not yet produced a single car on a production line. But last week it stood to make a "paper profit" on additional stock, which it has not yet issued, either, that flabbergasted the most get-rich-quick Wall Streeters.

Last September, the corporation sold its first stock (1,700,000 shares) at $10 a share. In the booming stockmarket it climbed slowly to $15 a share in over-the-counter trading. On Jan. 3, the corporation announced plans to float an additional issue of 1,800,000 shares, asked the Securities and Exchange Commission to approve. At the market price, the new issue would have brought some $27,000,000 to the corporation.

Then Kaiser-Frazer ran full-page ads announcing that its cars would soon be on display, although actual car production is months away. Front-page newspaper stories about Kaiser-Frazer's new labor contract brought more publicity. Plans to lease a West Coast plant leaked out. Result: Kaiser-Frazer stock shot up from 15 to 24 1/4. At the new high price at which the stock is now selling, the new stock issue would bring the corporation over $43,000,000.

Thus, K-F would collect an additional $16,000,000 for its stock--if SEC approves the new issue and the price holds. At week's end SEC had not made up its mind. Meanwhile it was looking into the unprecedented rise in the price of K-F stock to see if any SEC trading rules had been violated.

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