The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1914-01-18
QUEER SITUATION OF
. MELON" CUTTERS
American Tobacco Shareholders
Have Problem-Imperial Stock
Has Two Values.

Some time during the next three
months the American Tobacco CO. will
make an announcement of the distribu-
ton of the stock II holds in the I'm
perfal Tobacco Co As has already
been announced. this distribution will
be IN the neighborhood OF $50. 900
shares Of Imperial stock, or in the ratio
OF approximately nine shares of I'M
periai stock 10 the holder OF ten shares
OF American Tobacco Co common
stock
1t had originally been Intended by
the American Tobacco Co. managcn,ent
TO make some official announcements Of
mo plans at the close of last year but
! this Official notification has gone over
until alter the annual meeting of the
imperial Co, which occurs next month
~ peculiar condition exists in CON
ncction with the distribution of this
STOCK, and which makes necessary n
charge in the bylaws of the Imperial
Co. In its ruling on transfer of stock
Under the present bylaws OF the
imperial Co, the American Tobacco Co.
is not privileged to dispose OF its I'm
perial stock even to it's own stock
holders, although it can sell it's I'm
pcrial stock back 10 the Imperial Co
as corporation for f2 n share
III is in order that this power may be
extended to the Individual stockhold
ers of the American Tobacco Co. that
the delay has occurred in the official
announcement
The question naturally arises as 10
the real value of the stock to be di-
vided among the American Tobacco
common stockholders. Each wear tn.
imperial Co. sets a price at which il
VIII buy in its stock The American
Tobacco Co.'S holdings are CLASSIFIED
as ~ ordinary shares. Al the he
ginning OF 1912 the Imperial Co set
price Of 20 on these shares.
the holders The stock cannot be nth
crwisc transferred
The "E3" ordinary shares occunv
ABOUT the same position as the common
stcCk In most OF our industrials and
arc naturally entitled to share I'm any
excess profits over requisite dividends
or other classes of stock In 1912 30
per cent in dividends was paid the
holders of 81 shares and those who
know say there IL little doubt but Tia,
dividends Will be at least up 10 30
rcr cent this year. Even with the 80
Ter cent dividends paid last year. tho
Imperial Co. laid aside large surplus
estimated on 30 per cent annual
dividend rate alone ana excluding the
large excess or earnings over divi-
dcnds. the "B' ordinary shares are
worth on basis OF a per cent re-.
turn. 10. or approximately 500
Prominent tobacco interests in This
country who arc thoroughly acquaint-
ed with the value OF the 'I.'' shares
estimate their investment value to he
closer 10 s3o than $25
In other words, the American Tobac
co common stockholders will shortly
De hpp"rpohed stock on which they
VIII receive At least 80 per cent in divi-
dends. but which they cannot sell I'M
less the imperial co. rules otherwise
AT Its annual meeting. for more than
Hlo shar" This will mean little to
me holder who is willing to keen the
STOCK as an Investment. but the market
price VIII still be $40. Small wonder
that the holder OF American Tobacco,
common who is on the inside" Is
Specializing as 10 thc real value OF Tho
extra dividend he will receive IL
estimated on - cash basis