HIGH FINANCE: Deal for Farnsworth

The plant of the Farnsworth Television & Radio Corp. in Fort Wayne, Ind. was about as lonesome as a haunted house. Production had virtually stopped, employment was down from 2,500 to a skeleton crew of a few hundred. Because of its heavy losses (TIME, Jan. 24), Farnsworth stock, which had hit a high of 11¾ a year ago, was slipping steadily.

Last week International Telephone & Telegraph Corp. and Farnsworth officials helped kick it farther down the ladder. I.T. & T. had agreed to buy Farnsworth through an exchange of stock, one share of I.T. & T. for twelve of Farnsworth. Since I.T. & T. was selling for $9.25 and Farnsworth for $2.87, the deal meant that Farnsworth’s trade-in value was only about 77¢ a share. That touched off a selling wave.

In the next two days, Farnsworth led the big board in the number of shares traded, and dropped to 1⅞. At week’s end, Farnsworth stockholders had still to approve the deal. But those who had known about it could have—and may well have—cleaned up by selling Farnsworth short. The SEC was “looking into the matter.”