STOCK PROSPECTUS STOCK MARKET GAME ‘Most of the following stock companies existed in the 1920's. Some became successful, others failed. Read the following prospectuses carefully and decide which stocks you wish to purchase. In the game there will be 7 price changes between 1920 and 1929, when the game ends. Student brokers have been selected in your class; they will buy or sell stock to you as new stock prices are posted. ‘You will be given $400 to invest. The game begins in 1920 with each share of stock selling at $10 a share. Stock will only be sold in 10 share blocks or at a beginning price of $100 a certificate. You may buy or sell your stock at any time at the listed price, except when the market is closed to post new stock prices. KROGER FOODS: A newly established regional food processing company. It has canneries in five or our major West Coast cities and deals basically in fruit and tomato products. It has recently offered share to the public and it has been listed on the exchange for just one week. Market experts view this entry as rather speculative and are unwilling to venture any opinions on investment opportunities with Kroger Foods. At present Kroger Foods hopes to purchase five other regional food processors. If successful, Kroger Foods could be an excellent money maker with national markets, Of course, food industries always depend on agricultural prosperity and good crops; this year may be questionable. A good crop and successful merger could make many stockholders very wealthy. RADIO CORPORATION: This company has long been considered one of the better buys in the field of electronics. This corporation seems to have a bright future. Market experts see this corporation as a good, long term investment, which is safe and provides security for its stockholders. In the past year, it has made a small gain and could continue to grow slowly. The future of Radio Corporation will depend on its new production models and if they are competitively priced. MAMMOTH OIL: Owned and operated by Harry Sinclair. Mammoth has oil leases in Elk Hills in California. The newly opened field, which geologists feel may be the largest oil field in the United States, has 25 producing wells at the present time. Sinclair is rumored to have the backing of influential government employees. Mammoth has borrowed large sums of money to explore for oil in California and Wyoming and to develop Elk Hills. Secretary of the Interior Fall is reported to be a large stockholder. Sinelair’s company has not paid dividends in the past 5 years of operation. The value of Mammoth Oil stock has fluctuated between 20¢ and $5 a share for the past two years,THE NATIONAL BACK OF GOTHAM CITY: This bank is one of the oldest, wealthiest, and most conservative financial houses in the country. The owner is proud of saying that his, bank still operates on the same principles first established by Alexander Hamilton in 1790. This stock is so stable that when it once dropped two points in a week, back in 1893, it set off a small- scale recession. This bank has paid an annual dividend for 130 years. DURANT MOTORS: This corporation was founded by a well-to-do carriage maker in Flint, Michigan, Durant took over several undercapitalized companies and brought together 12 auto producers, including Oakland Motors. Rapid expansion has left the company badly undercapitalized. Management fears that Durant Motors may be taken over by the banks. The company is attempting to produce a low cost car and has hired Charles “Boss” Kettering to ‘manage a number of plants. Kettering plans to produce a car with a “self starter.” Durant Motors presently produces the Locomobile, the Durant-Four and the Flint. His long range plans are to develop a giant combination of automobile manufacturers. At this time investment in Durant Motors is risky due to a lack of capital. MIDLAND UTILITIES: Owned and operated by financial genius Samuel Insull. Midland is part of a billion-dollar corporation operating in 32 states. Several of the most powerful banks and brokerage houses of the Midwest are regarded as his instruments. Midland produces electricity for central Chicago and is expanding into the suburbs. Midland has developed and is using giant steam turbines to generate power. Insull’s financial manipulation and the mass marketing of stock has made Midland one of the most powerful corporations in the Midwest. KANSAS PACIFIC RAILROAD: The K&P has been in existence for over 60 yeats. Their assets are many and diversified. In the past they have shown to be a stable company with small but regular dividends. While many railroads are faced with declining profits, the K&P shows a steady increase. They are presently expanding into the Southwest and plan to extend their holdings into Mexico, This telephone company is just being capitalized. This is their first public offering of stock. They presently plan to raise 12 million dollars and manufacture a dial-telephone. This process reportedly will revolutionize the use of the telephone. Their management is young and inexperienced. Any capital invested should be considered high risk. But currently, their stock is ‘one of the hottest on the exchange, It has tripled in value since it was placed on the market less than two months ago.STOCK RECORD Opening Stock Price 1920 192219231925 192719281929 Kroger $10 Radio Corporation | 10 Mammoth Oil 10 Gotham Bank | 10 Durant Motors | 10 | Midland Power | 10 Kansas & Pacific | 10 Tel-Tone 10BROKER INSTRUCTIONS Asa stock broker, you will buy from or sell stock to the players. As the game begins you have all the stock certificates. There are 8 stocks; they should be separated into 8 piles. Each stock certificate represents 10 shares, so the selling price should be 10 times the posted value. For example: if a share of stock is selling for SB, the player must pay $80 for the 10 share certificates, (10 x $8 = $80). Bach stock is worth $10 a share, when the game begins. Players pay $100 for each certificate, After every player has purchased stock, new prices will be posted. When stock is purchased, you must check the current price per share and sell or buy at that price, For example: if player has 3 certificates (30 shares) and the current listed price is $4 share, you would pay him $120 for his 3 certificates; (30 shares x $4= $120). Students may buy or sell their stock at any time, except when the market is closed for new postings.OUTCOMES 1920 New Stock Price Per Share Kroger - purchases a West Coast food chain $12 Radio Corporation -new model released with built-in antenna $13 Mammoth Oil - 9 wells begin producing in Wyoming Field si4 Gotham Bank - Bank declares a 6% dividend sil Durant Motors - fails to make payment on notes to the Gotham Bank $7 Midland Utilities - Midland extends services into Michigan and Wisconsin $13 Kansas Pacific - K&P will pay no dividends this year because of expansion into the Southwest 39 ‘Tel-Tone - Dial telephones will be installed in parts of New York City $15 1922 Kroger - Merger with large Eastem chain of stores sis Radio Corporation - 15 patents are purchased from the Edison’s company si4 Mammoth - Largest oil field in America may be located under Mammoth Oil Lease in Tea Pot Dome, Wyoming si9 Gotham Bank - Stock price remains the same SiDurant Motors - Locomobile sales are depressed because of competition from Ford Motor Company 85 Midland Power - Insull’s financial manipulation allows Midland to take control of Commonwealth Edison 819 Kansas Pacific - Profits rise as agricultural shipments from the Southwest begin $10 Tel-Tone - New York Stock Exchange announces that Tel-Tone has shown the greatest increase of any stock listed on the exchange 2 SPECIAL NEW BULLETIN: President Harding is suffering from a coronary seizure and may have pneumonia. His is reported to be dying, The stock market will close in 5 minutes for new postings. HARDING DIES. -New Stock Prices per share Kroger $13 Radio Corporation $13 Mammoth $16 National Gotham Bank si0 Durant Motors s4 Midland Power si9 Kansas and Pacific 99. Tel-Tone si91925 Kroger - Com blight on Kroger farms causes 90% loss of crop si2 Radio Corporation - speculation on new patent causes rise in stock prices sis ‘Mammoth Oil - Japanese offer to buy the total production of Elk Hills $21 Gotham Bank - French government announces that they will begin to pay their World War I war debts to U.S. Banks si2 Durant Motors - The Du Pont family begins to buy large blocks of Durant Motors stock 37 Midland Power - Insull fears Cyrus Baton of Cleveland may be trying to take over Midland by purchasing large quantities of stock 522 Kansas and Pacific - Speculation on increased profits from holdings in Mexico cause stock price to rise sil ‘Tel-Tone - Announces completion of successful merger. Speculation on the Market continues. S24 1927 ‘New Stock Price Per Share Kroger - Speculation that Purity Markets are buying Kroger for an attempted take over si4 Radio Corporation - Rumored merger with the Edison Company causes stock to rise : si7 Mammoth - Congressional committee begins an investigation of the Mammoth Oil leases. Possible fraud S13 Gotham Bank - Bank stock remains unchanged $12 Durant Motors - Louis Chevrolet is hired to design an inexpensive automobile $10Midland Power - Cyrus Faton begins dumping large blocks of Midland stock on a depressed market $18 Kansas and Paeifie - Drought in the Southwest and depressed farm prices cause profits of K&P to fall $10 Tel-Tone - Drop of two points caused by J.P. Morgan selling 200,000 shares. Brokers see only temporary setback $22 1928 Kroger - Food prices are depressed because of agricultural surpluses $13 Radio Corporation - Merger with the Edison Company falls through when Radio Corporation pays no dividends si4 Mammoth Oil - Harry Sinclair is called before Congressional committee. Secretary of the Interior Fall is indicted for fraudulent oil leases 37 Gotham Bank - Announces profits have increased 5% over the last quarter S13 Durant Motors - Durant Motors and Fisher Body have announced a merger. ‘New corporation will be called General Motors S13 Midland Utilities - Reports in the Chicago Tribune disclose Insull’s Company is a “House of Cards” ready to crumble si4 Kansas & Pacific - New oil ficlds in Oklahoma cause a new boom along Kansas Pacific track si2 Tel-Tone - Fails to rise as predicted. Brokers are unable to explain the downward trend. sitWEDNESDAY, OCTOBER 23, 1929: ‘The market slipped today as the government announced that home construction, an indicator of prosperity, was at an all time low. The Federal Reserve Board also announced that a change in the prime interest rate would take place in the near future; speculation on the stock market is getting out of hand. It is rumored that the House of Morgan intends to sell 12 million shares of ‘common stock at a loss, before interest rates change. The Gotham Bank announced that margin buyers of stock are being notified that they must put up more money to cover today’s losses. After reading this announcement close the market after 5 minutes. THURSDAY, OCTOBER 24, 1929 (BLACK THURSDAY) Panic hits Wall Street, 12 million share are traded in one day on the New York Exchange. $700 million is lost by stock holders in one day as the market takes the greatest dive in history. New Stock Price per Share Kroger - $8 Radio Corporation - 84 Mammoth Oil - 2 Gotham Bank - si2 Durant Motors - siz Midland Utilities - 83 Kansas & Pacifie— $8 ‘Tel-Tone - 86