Wavebreak

On the wave of Wall Street's enthusiasm over television, the stock of Farnsworth Television & Radio Corp. rode high. In December, it was one of the 20 most active stocks on the Big Board, and held steady at about 7 points, despite the company's report of a $724,000 loss for the six months ending Oct. 31. Last week a New York Stock Exchange clerk looked over a registration statement which Farnsworth had filed with SEC for a new stock issue of 270,000 shares. He noticed something odd. It showed a loss of $3,100,000 for the six months. The Exchange suspended trading in the stock for an hour, to give Farnsworth a chance to explain.

Farnsworth President E. A. Nicholas explained that the new figure included $1,765,000 which the company had decided to put aside for inventory reserve, and $396,000 for possible loss on investments in an affiliate. Audit adjustments accounted for the remainder. When the Exchange lifted the trading ban, the stock slumped 1 7/8 and dropped another 3/4 next day to 4 3/4--a new low for 1948-49.

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