F-day

"Everybody thought he had a God-given duty to go out and buy Ford stock," groaned a harried Chicago stockbroker. "We didn't have near enough to go around."

As Wall Street expected, the 10.2 million shares of Ford stock put on sale for $64.50 by the Ford Foundation promptly "went out the window" on F-day. The seven syndicate managers (Blyth & Co., Inc.; First Boston Corp.; Goldman, Sachs & Co.; Kuhn, Loeb & Co.; Lehman Bros.; Merrill Lynch, Pierce, Fenner & Beane; White, Weld & Co.) each got 307,500 shares. But the 2,000 other firms that helped sell the issue got far less, sometimes as few as 1,500. Even giant Merrill Lynch could average only 9.7 shares per sale in its 114 offices.

Canadian dealers, free from SEC rules, began trading the stock several hours before the SEC officially approved the U.S. stock registration. In short order the price soared to $69.25 a share. In U.S. over-the-counter markets (Ford will not go on the New York Stock Exchange until about March 1), it shot to $70.75; on European markets it rose to $72.80.

Next day big sell orders came in from European markets and speculators, and by week's end Ford stood at 65 5/8. No stock had actually changed hands (certificates will be issued this week); everything was on faith and brokers' chits. The estimates were that as many as 500,000 investors had bought shares for a gross total of about $660 million.

As Wall Street well knew, the fantastic buying spree was more on the magic of Ford than on the intrinsic value of the company. Though Ford is in blooming good health with assets of $2.4 billion, sales of $4 billion, and earnings of $312 million for the first three quarters of 1955, its stock is no better buy than many another security. In the auto industry, for example, Ford's book value of $34.40 per share is about twice General Motors' but less than half Chrysler's $73.30 per share value. On the analysts' price-earning ratio, Ford at 65 is selling at eight times its 1955 earnings of $8 per share, midway between Chrysler (seven times earnings at 79 1/8) and General Motors (ten times earnings at 43 1/2). As for dividends, Ford has announced that it will start off with a first-quarter payment of 60-c- per share, then consider the rate to be paid for the rest of the year. If dividends are $3 per share in 1956, as many expect, Ford would pay 4.6% on its current market price, about the same as G.M. and slightly more than Chrysler.

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