The Crittenden Automotive Library

AMAZING GROWTH OF HUDSON MOTOR

Topics: Hudson, Edsel Ford

AMAZING GROWTH OF HUDSON MOTOR

The New York Times
3 November 1925

Wall Street Interest Stirred by Prosperity of Company Started by a Haberdasher.

EDSEL FORD AN INVESTOR

Not Seeking the Stock for Control—Offer to Buy Their Shares Refused by “Insiders.”

The extraordinary advance of the shares of the Hudson Motor Car Company on the Stock Exchange, from the year's low of 33¾ to the high yesterday of 139½, have drawn attention to a typical business romance. This is heightened by the fact that a considerable amount of the stock has been acquired recently for Edsel Ford and his wife as an investment.

The Hudson Motor Car Company was started with a few thousand dollars borrowed capital, put up by a Detroit haberdasher named Hudson. Today R. B. Jackson, son-in-law of the haberdasher, who financed the first car made by it, and W. J. McAneeny, operating Vice President, are the largest “inside holders” of the stock. Mr. Jackson also represents Mr. Hudson's interest, which is also very large.

The Fords have entered the Hudson situation very quietly and for investment rather than control of the company. Several weeks ago reports were current in Wall Street that Henry Ford had acquired the Hudson company. This was promptly denied by Mr. Ford. What has happened is that Edsel Ford has purchased several thousand shares of the stock in the open market and has transferred each share purchased into the name of his wife and has paid for it in cash. The buying started quietly several months ago. On last Friday Edsel Ford placed an order with one of Wall Street's largest brokerage houses for 7,000 shares of the stock. It was executed from the uptown office of this brokerage house and the prices paid were from 106½ to 114 per share. The Ford interests are now said to be the largest “outside” interest in the Hudson company. They have no voice whatever in the management.

The earlier financial history of the company is of interest to Wall Street because of the change in its condition from a small, struggling company to one of affluence. On April, 1922, the company needed money and strenuous efforts were made by a New York bank before it succeeded in rounding up sufficient brokerage houses of influence through which a public offering could be made. A total of 400,000 shares of the stock was offered to the public at $20. The house which finally headed the syndicate exacted special compensation for that duty. At the same time, some of the largest stockholders of the company gave members of the syndicate calls on their individual stock, ranging from 27 up, and many of these calls were exercised in that year. The stock has thus had wide distribution.

In the first year the stock was out the company earned $6 per share. Its earnings thus far this year have been $12.50 in the first nine months, and it is estimated that the full year's earnings will be between $16 and $18.50.

A curious incident of the recent history of the company, which came to light yesterday from a reasonable source, is that last September the Hudson Motor insiders received a blanket offer of $90 a share for their stock. It was then selling in the open market at 62. The stockholders refused to sell, giving the answer that the business then on the books would bring such earnings as to make the offered price look ridiculous. That occurred yesterday when the stock sold up from the low of 117¼ to 139½, after which it declined to 130, at which price the stock was up 13 points for the day. The market was wide and extremely active in these shares during the entire five hours.

Officials of the company and insiders in New York say that present stockholders are inclined to disregard the fluctuations on the Stock Exchange and to make sure that control does not get away from them. The September and October output of the company was 26,000 cars for each month. It is planned to speed this up to 30,000 cars per month in 1926.