Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, March 8, 1994 TAG: 9403080102
SECTION: BUSINESS PAGE: C-8 EDITION: METRO
SOURCE: GREG EDWARDS
DATELINE: LENGTH: Medium
On the first day of trading since Friday, when the death of John W. Hancock Jr. became public knowledge, the steel company's stock closed up $1.37 1/2 in heavy trading.
Hancock, 89, died Thursday after a brief illness and was buried Friday. According to his wishes, his death was not announced until after the funeral.
Roanoke Electric Steel's stock, which closed at $16.37 1/2 on Friday, closed Monday at $17.75 and reached a high of $18.50 at one point during the day.
The trading of 55,600 shares on Monday was very heavy for what is normally a thinly traded stock. The company's shares are traded in the over-the-counter market.
Although Hancock had stepped down from a top management role in the steel company he started in 1955, he was chairman of the executive committee of the board of directors and was the company's largest shareholder, with 6.5 percent of its stock. He held 344,650 shares on Nov. 19, 1993, according to the proxy statement to shareholders.
Theories among traders vary on why the market reacted the way it did - with an uptick - to the news of Hancock's death.
One is that traders think the company will be for sale now. Another is that the company's bottom line will look much better now that it doesn't have to pay Hancock's yearly salary and benefits, which amounted to well over $500,000 last year. According to the proxy statement issued in December, Hancock was paid $135,684 in salary, a bonus of $406,991 and other compensation totaling $12,000.
Stock brokers note that steel industry stocks as a group have been doing very well lately, with steel mills running full blast. Still, Roanoke Electric Steel's stock, which has been gradually increasing in price for the past two years, was not moving anywhere near as dramatically before Hancock's death.
"We weren't seeing that last week," said Joe Ingram, a broker with Wheat First Securities in Roanoke.
The volume of stock traded was in the 12,000-to-16,000-share range early Monday and took off later in the day, Ingram said.
Donald G. Smith, president, chairman and chief executive officer, said a decision about filling Hancock's spot on the board will not be made until the executive committee meets later this month.
by CNB