Third Time Around

Henry J. Kaiser last week needed more money. And he expected to get it from the public, in which he has boundless confidence. Twice before, that confidence has been vindicated. The public has invested $53.5 million in Kaiser-Trazer when Kaiser had little to offer but hope, and the magic of his name.

Last week, when K-F proposed its third stock issue (1,500,000 shares, price undetermined), it had something more concrete to offer. In the prospectus, filed with the Securities & Exchange Commission, K-F said it had grossed $227.5 million in the first eleven months of 1947, and had netted a profit of $15.5 million. (These figures, said K-F, were unaudited, thus subject to change.) By November, the rate of profit had risen to about $4.7 million a month, enough to wipe out the 1946 loss of $19,000,000. And K-F still had $18 mill;on in cash in the till.

Then why did K-F need more money? K-F said it wanted to spend $12,000,000 on new equipment and inventories to boost production of automobiles to 1,500 a day (present rate: 950).

The rosy profit figures did not cheer the stockmarket. It apparently felt that K-F's cars, overpriced when compared to other makes, may soon run into tough competition. On news of the new issue, the price of K-F's existing 4,750,000 shares of common stock fell from 14 1/4 to 12, then firmed up slightly at the weekend.

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