Radio Shares

The pyrotechnics recently seen in Radio Corporation shares on the Stock Exchange has attracted universal attention to this new business. Last fall the stock sold as low as $26.87 a share. From this level they have rushed up as high as $77.75 a share. Investors are now questioning how far this advance has been justified by earnings of the Radio Corporation.

Altogether, there are 1,500,000 common shares authorized, of which 1,155,400 have been issued. Of the latter, 762,000 shares (or 65%) were recently held by the General Electric, the Westinghouse and the United Fruit Companies, leaving 393,400 shares (about 35%) in the hands of individual security investors and speculators. Since many of these latter are held by what Wall Street calls "firm hands," the floating supply of Radio common shares is not large, unless the three above-named corporations have begun to sell out their large holdings. Consequently, the amount of stock available in the stock market, temporarily at least, is not large.

Gross earnings of the Company have increased steadily: in 1921 they were $4,189,031; in 1922, $15,101,044; in 1923, $26,570,814; and in 1924 they are estimated at $45,000,000, or about $4.00 a share on outstanding common shares. The speculation in Radio shares is obviously prompted by the apparently limitless future of the new industry. Sales of radio sets and parts have increased from $2,000,000 in 1920 to $400,000,000 in 1924, and the "saturation point" is still apparently far away. The radio industry appeals to the average American's imagination, and how far it will fatten his pocketbook remains to be seen.