Paper Clips and Staples, Too

For many small businesses, counting paper clips is more than a cost-cutting measure; it is a matter of survival. In the past 3 years, the $60-billion-a-year office supply industry has witnessed the arrival of warehouse retailers, vendors of bulk office supplies to small businesses and individuals at discounts of up to 60% under list prices. Explosive growth has prompted several companies to tap the equity market, and the stocks of those concerns have bid up sharply. Staples Inc. sold an initial 3.25 million shares at $19 a share and traded above 23 in the first session, closing at 22 1/2. Office Depot, whose shares now sell for about $31 each, went public less than a year ago at only $10 a share. Office Depot is both the largest and the most profitable office-supply warehouse company, earning $3.8 million in 1988. Most of the warehouse retailers have a “club” membership policy that provides demographic information about customers and creates a mailing list for catalogs and other direct-marketing uses.

Full text: Barron’s National Business and Financial Weekly, May 1, 1989

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Sitting Pretty: Public Companies in Northwest Just Fine Since Market Crash

The past 18 months, since the spectacular but short-lived Wall Street crash of 1987, have been good to most of the largest public companies in the Pacific Northwest. In 1987’s two-month bear market, punctuated by a 508-point drop in the Dow Jones industrial average Oct. 19, many Northwest companies lost large chunks of their stock-market value, and many investors took heavy losses. But as the accompanying chart shows, many have recovered sharply in the past year and a half. (The market value of a company indicates the stock market’s theoretical assessment of what that company is worth; it is calculated by multiplying the price per share by the total shares outstanding.) (excerpt)

Full text: Seattle Times, May 08, 1989

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Is Conrail on the Takeover Track?; With Stock Curb Set to End, Rail Firm Prepares for the Future

Under the 1986 law that pieced together Conrail-a now-profitable freight carrier serving the Northeast-nobody was allowed to buy more than 10 percent of the company’s stock. That prohibition ends next April. [Andrew Geller] says Conrail’s management is painfully aware that it must get the company’s stock price (around $36) higher if it is to avoid the risk of a takeover attempt. And he believes an increase in the company’s $1.20 a share dividend is one thing Conrail will probably do in an effort to improve its stock price. When Drexel Burnham Lambert analyst Linda Dunn issued a report on May 5 on Conrail’s financial strength and the chances of a restructuring of the company, Conrail’s stock climbed sharply on twice its normal trading volume. Dunn says that Conrail’s financial prowess “could trigger either its restructuring or an outsider taking an interest.” How much is Conrail worth? Even though the rail line isn’t the type of company that can be broken up, some analysts still think Conrail could command $55 a share in a buyout. But investors will have to wait until April Fools Day for even a chance to collect.

Full text: The Washington Post (pre-1997 Fulltext), May 14, 1989

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Union Enterprises Ltd. taking $8 million charge on Midland investment

Through Union Enterprises, Unicorp controls 34 per cent of Midland Doherty. Unicorp chairman George Mann replied that his top executives are among the best in Canada, while [James Leech] cited several possible reasons for the poor stock prices. Leech claimed that moving much of the merchant banking business into Kingsbridge Capital, and bringing Lincoln Savings directly under Unicorp Canada, will help Unicorp’s image on the market.

Full text: Toronto Star, May 19, 1989

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