The Miami News from Miami, Florida • 61

It's a new game in OTC market as hedge fund dealers sell short frafjnrg rarrrmm Hi tin I3fj Holiday Inn planned July 14, 1972 thus wreaking havoc with company financing plans. John Van Brunt, general counsel of Roblnoladd Is out there fielding taking the line drives in the midsection. Last May, this Wilmington-based builder filed a prospectus covering a offering of the company's common stock. This secon-day offering was to "put us In clover financially, as we expected to raise $13 million." "Why not? The shares had been trading In a narrow range of IS to 20 bid since March, the company was The New York Timet News Strvlct NEW YORK You might call it a secondary dip in the pool. It's certainly a new version of the old bear raid in which Wall Street professionals sold stock short in huge quantities then covered their positions at the depressed prices they had brought about themselves.

This is hard to do these days with shares listed on the New York Stock Exchange, because there are usually millions of shares in public hands. This usually makes it difficult to have an Impact on price; cash margin requirements for short-sellers discourage it; and short-selling can only occur after an "uptick" which means a rising quotation from the prior price. But, it's a whole new ball game in the over-the-counter market and to some degree on the Amex where hedge fund operators appear to be selling short against forthcoming equity offerings, and Observe local customs ume soared and on June 6, we got hit with a turnover. The stock reeled, naturally, and closed at 18 By June 8, the day the stock was scheduled to be offered to the public, the price was at 16 But wait. Shortly prior to June 8, the company learned that both the Securities and Exchange Commission, and the New York State attorney general's office wanted more information so the offering was delayed.

By June 22, the stock had worked its way back to 18, and volume was normal again. Then on June 23, the underwriters told the 83 members of the offering syndicate to prepare for an offering on June 29. That very day, the stock dropped one point on a turnover. Then, on June 28, the day before the projected financing, 43,900 shares changed hands and the stock closed at 16'4 bid. Yesterday was a bad day.

As the managing underwriter, W.E. Hutton, said, "They hit us hard again." The stock closed at 15, bid on heavy trading. "What shocks me is that Wall Streeters wring their hands saying these bear raids are perfectly legal. I happen to know the SEC is going to see if a case can't be made for illegal price manipulation in this situation. Ground will be broken this week for Greater Miami's 13th Holiday Inn, to be located on a 4.85-acre site south of the International Airport overlooking Blue Lagoon.

The 10-story, $5 million structure will be the tenth Holiday Inn franchise held by Mississippi Management Inc. of Jackson, Miss. The Inn of Miami Inc. will own the facility here, and Mississippi Management will supervise operations. The inn, with an expected completion date of January, 1974, will have 269 rooms and 25,637 square feet of space.

Americans of the 70 's saving, not investing 5-D doing well and it seemed clear that we could raise the money at a price of at least 18. "After all, only about half of the shares would represent dilution since we had agreed to repurchase and retire at 10, some 387,000 shares formerly owned by members of the Ladd family. Our new capitalization would be 2,200,000 shares, up from Van Brunt said that everything moved along according to plan and he confidently busied himself with the usual routine connected with a financing. On June 1, the underwriters indicated that the deal would probably come to market on June 8. The stock was at 18 bid on June 1, and there was no reason to think that the shares wouldn't come to market at the anticipated price of 18 or better.

"The stock had been ticking along at its normal 3,500 to 4,000 shares a day with little change Im price until that fateful announcement. But, then it took a dive. Vol Glenoit Mills tells secret of success SMART CHART by Stansbury BUSINESS MIRROR By JOHN CUNNIFF I 1 i I I I I I. C.fl.itM It'l ICS ANf-HM 'IMl The Associated Press NEW YORK One advantage of a multi-national company is that it can try out a new idea in one country and then extend the application to others, if it works. That is one reason, claims Glenoit Mills, that it has been able to extend its international operations even though its parent company, Botany Industries, is under reorganization.

Another reason, says Clarence Hafford president of the subsidiary, is that the company bows to local customs in its plants in seven overseas countries. "Each country has its own particular innovations to The shenanigans on Wall Street in recent years probably added to this conviction. Investors were made aware every day of the dangerouss financial position and practices of their brokers. Unlike many students of consumer affairs, Edie expects the savings trend may continue through 1972 and into 1973, although perhaps with diminishing force. Meanwhile, the Dow Jones Industrial Average remains stuck below 1,000 points, as it has been for six years, partly because the public remains, as they say, on the sidelines, leaving the professionals to play the game among themselves.

"Ace Clifford hos really been producing since the Chief caught him trashing the executive suite." 7-W Market seen bullish The Associated Press NEW YORK "This still looks like a bull market" despite the uncertainties of recent months, the current market letter of Harris, Upham Co. said. "Neither the bulls nor the bears have been very happy during the sidewise market of the past four months, although both could have made good profits in the right issues," the publication said. "Some decline, after the sharp advance of over 20 per cent during the preceding six months, was only natural since profit taking is usually postponed until the lower tax rates on stocks held over six months are possible. Added to that was the flaring up of the Vietnam war and the emergence of a candidate against Nixon who has expressed some rather radical tax ideas.

conform with its individual mores," the company said. "In Finland, they have a tile swimming pool which recycles its water for use as the plant water supply, as well as sauna baths, which are as necessary in a Finnish factory as coffee vending machines in a U.S. factory." Still another advantage of multi-nationalism lies ir. the fashion field. Glenoit makes deep pile fabrics for fashion and home furnishing fields.

Regional Clothing in the seven countries where Glenoit works can serve as inspiration for fashion to be shown under the sponsorship of the company's outlets in the other six. An example lies in the adoption of a Lapp idea of a knitted fabric which is warm and fuzzy inside but closely knitted outside. Glenoit-Belgium has just opened its plant at Zele, Belgium to serve the Common Market countries provide personnel as well as fashion ideas. For instance, Glenoit Israel hired an Israeli designer, Riki Ben ARy he is an Israeli army corporal on the side to prepare a line of coats which had its first showing in Tel Aviv. This brought in orders from Holland, Germany and Italy as well as the United States, at which the line was primarily aimed.

Total orders for the line were 20,000 coats with a retail value of over a million dollars. Hafford points out that the multi-national aspect of Glenoit enables it to combine the techniques of the United States with the ideas and fashions of Canada, the British Isles and Mexico as well as Finland, Belgium and Money-grubbing is healthy, Bobby Fischer detractors told (Vacationing? We'll Feed the Children Thi Associated Press NEW YORK During the great economic expansion of the 1960's, millions of Americans for the first time bought stocks and mutual funds, and a good many thereby established themselves as capitalists. Now in the '70's, many of these same people are reluctant to risk their fortunes. Rather than checking the prices of stocks each day, they take out their bankbooks and smile at the big savings figures. The odd turn of events could hardly have been forecast, and a good many economists and others continue to believe that Americans will desert their conservative ways and become more daring again.

So far, however, there is almost nothing to suggest that this will take place. Long lines of depositors are strung out before the teller's cages, while many a broker waits impatiently for the telephone to ring. Mutual funds have been especially hard hit, with redemptions exceeding sales in most recent months. In the first quarter of the year, the Purina drops Checkerboard The Associated Press NEW YORK Ralston Purina Co. announced plans yesterday to dissolve its Checkerboard Foods Division, engaged primarily in the manufacturing and marketing of frozen convenience foods.

Ralston said the action was not expected to have any effect on earnings this year. They said the division did not meet its "corporate profit criteria," but added that its other consumer products group was doing very well, especially pet foods. Earnings up 23 Bankers Trust says The Associated Press NEW YORK Bankers Trust New York Corp. reported a 23 per cent earnings jump before securities transactions and extraordinary gains for the second quarter. Profits totaled $13.1 million, versus $10.7 million in 1971.

After an $8.3 million extraordinary gain from a joint venture with Bradford Computer and Systems net income for the quarter totalled $21.6 million, up $10.9 million from 1971. The firm is the parent company of Bankers Trust nation's seventh largest commercial bank. liquidation rate was at an annual rate of dose to $3 billion. Not only have jobs been lost in this once explosive growth industry, but some funds have been forced to switch the no-load status, which means they have dropped not only salesmen, but sales charges as well. Ownership of corporate shares also has been reduced by the trend to caution or conservatism.

Lionel Edie the economic consulting arm of Merrill Lynch, the biggest stock brokerage firm, comments: "Consumers have been selling off their 1 d-ings of stocks for several years; this liquidation amounted to $6.5 billion in 1971 and at an annual rate of over $7 billion in the first quarter of 1972." Ironically, while many consumers apparently have the funds to risk, they desire, instead, to take the slower but safer route to wealth. As Edie notes, they find banks "convenient, financially at-tracelve and safe One explanation for the high savings rate it has remained for many months close to 8 per cent of take-home pay compared with a more traditional 5.5 per cent is said to be uncertainty or even fear. The main ingredient of this disposition appears to have been the high level of inflation, which now seems to be abating from 6 to 7 per cent rate in 1969 and 1970, to a more acceptable 3.5 to 4 per cent. Curiously, many small investors originally entered the market because they believe stocks were a hedge against inflation. Stocks, they were told, floated on the wave of inflation while savings were swamped and diluted.

However, the constant reminder that the economy was out of balance, and dangerously so, seemingly convinced them that while a savings account would build slowly if at all, it was preferable to the risks of equities. ST Like having WMjH a chcf yLvL at home! A AS TELEPHONE A 'J 'sfeT-L RIGHT NOW ffRrM" '1 INFORMATION JT l-ji "JsVva. TRY OUR VARIED MENU ORDER DINNERS DELIVERED 10 YOUR DOOR DAUY FOR WFFKIY MENU CALL 633 8066 IN SOUTH BROWARD LAUDERDALE 927-3266 nary person a brilliant bureaucrat, a musician, a scientist, a nuclear physicist, a prominent journalist, a factory executive, a famous athlete. Only recently was Spassky awarded better living quarters. Yet, an exceptional person can't be too exceptional.

He must adhere to the Party line. Because Alexander Solzhenit-syn writes about the hardships of Soviet life instead of glorifying Leninism-Marxism-Communism, he has been read out of the Writers' Union and criticized for winning the Nobel prize. He lives as an ex-communicant a genius denied publication in his own country. That's the tragedy of a single-entry system The State Over Everybody. Big Brother controls all jobs.

And deviation from Big Brother's rules begets the blacklist. The French political commentator, Jean-Francois Revel, in his book "Without Marx or Jesus The New American Revolution Has Begun," notes: "I am unable to explain why Europe, and not America, has been blessed with Hitler, Mussolini, the Moscow Trials, concentration camps, Petainism, Franco-sism, racial persecution, the Gestapo, the G.P.U. Why is it that the United States has always been able to preserve its democratic institutions and avoid fascism? And why is it that totalitarianism regimes occupy most of European territory today?" The answer is that a money-grubbing society gives people mobility, choice and economic latitude. It's a double-entry system. A man or women can make a livelihood in government as an elected official or as a federal, state or local government employee.

In America, businessmen would decide whether to publish or let Solzhenit-syn perish. Their rivalry for profits and prestige would override ideology and government protests, if any. ByJ.A. LIVINGSTON Miami News Financial Columnist "Product of a money-grubbing society." That's how a Soviet editor characterized Bobby Fischer for his failure to appear on time for his chess match with Boris Spassky. Inference: Communism is beautiful, capitalism is degrading it destroys human beings.

But does it? True, Bobby Fischer is a product of American society, as are Richard Nixon, Joe Frazier, Muhammed All, James Mi-chener, Gloria Steinem, Martha Mitchell, George McGovern, James Baldwin, Jacqueline Kennedy Onassis and Portnoy's Complaint But Bobby, like Portnoy, is not an American prototype. He's an adolescent eccentric at 29. Perhaps that's why he's usually referred to as Bobby. In the United States, he's been accepted because of his chess genius. But in Moscow, Theodore Shabad of The New York Times was told that "Russian public opinion would never stand" for his behavior.

That's the difference between diversity and authoritarianism. Between capitalism with its multiplicity of employers and Communism with a single employer. In the Soviet Union, If you aspire to a comfortable home with private kitchen and bath and emoluments such as an automobile, it's well to be a member of the Communist Party. But the party is not open to all. Men (11.3 million) are preferred over women (3.3 million); city dwellers over farmers; white-collar workers over blue-collar workers.

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