"Let me get this straight," the chief executive of the medium-sized technology company interjects, staring through the blue haze of the pipe smoke. t"This will cost me $21,000 to start plus . . . "
"Plus $3,000 a year after that," Bonnie Lee Knox responds quickly, filling in the rhetorical gap.
"But think of the advantages," she continues. "If, as you say, you are not public-relations-oriented, this would be your best course of action. It would give you the visibility you deserve and you wouldn't have to do anything.
"Besides, your company should be listed on the American Stock Exchange. There's so much investor interest in your company that a central, auction market would be better."
It is nearing the end of a long day for Bonnie Knox, and the chief executive's questions, while hardly belligerent, aren't warm either.
"I want to know your role," he demands.
"I want to sell you and other people in your area on joining the American Stock Exchange," she replies.
The chief executive says the whole matter bores him. "Brokers have been telling me ever since we went public (that is, sold shares to any investor who wants to buy them), 'Hey, your stock is really holding.' My answer to them is, 'Ho-hum". t
"I hear what you're saying. I'm not really negative," he adds. But he is not really positive, either. He swallows hard at the government-mandated reporting burdens his company has faced since it sold stock to the public, and he recoils at the added costs and paperwork that listing on a major exchange would entail.
She argues that the costs are small and that the American Stock Exchange requires little more reporting from listed companies than publicly traded companies already must file with the Securities and Exchange Commission.
Bonnie Lee Knox -- young and female, dealing daily with corporate officials mostly old and male -- is one of a handful of salespersons in the nation whose job it is to convince chief executives that the advantages of having their company's stock traded on an exchange far outweigh the costs.
Just as colleges send recruiters to high schools to find freshmen to replace tuition-paying, but graduating, seniors, so stock exchanges employ recruiters to find companies to replace those that leave. New-listing fees are a major source of income for stock exchanges.
And the pressure is heavy on Bonnie Knox and her colleagues. Over the last 21 months, the Amex (as it is called) lost 203 common stocks while adding only 66, according to exchange statistics.
On a recent day, Bonnie Knox criss-crossed a major metropolitan area, visiting two companies for the first time, touching base with another that had just listing on the Amex and commiserating with a fourth she hopes will list some day, but won't now because of deteriorating earnings.
None of the companies can be identified because of potential impact on their stock prices.
The American Stock Exchange has five employes whose full-time job is to attract new companies. The bigger, more prestigious New York Stock Exchange has 5 employes who divide their time between recruiting new companies (often luring them from the Amex) and keeping happy the clients they already have.
Most of the companies on the New York exchange are big and sophisticated, with many shareholders and large capital bases. The so-called Big Board lists 1,532 companies (fewer than 70 of them foreign and most of those Canadian).
There are some big companies among the 931 whose common stocks trade on the American exchange, but most Amex companies are medium-sized "growth" companies that often grow up and join the New York exchange or get gobbled up in mergers with other companies.
The New York Stock Exchange loses listings, too, but not as often as the Amex. Last year 51 companies left the New York Exchange, while 59 joined -- 30 of them coming over from the Amex.
By contrast, the Amex had 122 delistings last year and added only 33 common stocks. Besides the 30 that fled to the NYSE, another 45 either merged into another company or were liquidated. The rest were dropped because they couldn't meet the financial requirements for continued listing. So far this year, the Amex has delisted another 81 companies, and 33 have joined.
The loss of companies doesn't threaten to break the nation's second largest stock exchange -- the Amex has branched out into trading options and performs other services that generate income -- but Bonnie Lee Knox, 29, and her four colleagues must run harder and faster to attract new companies if the Amex is to remain the nation's second-most-important stock exchange, one where trading is dominated by individuals rather than by big institutions such as pension funds and insurance companies.
Since 1972 -- its peak year for listings -- the Amex has lost nearly 400 more stocks than it has attracted. In the same period, the New York exchange has lost about 30.
Knox -- with the Amex since 1975 and in her present job since last April -- spends at least 10 days a month on the road, combing a 13-state area that stretches from New Jersey to Florida and includes the Washington area.
Her husband of more than eight years, Steve, is a young corporate lawyer in suburban New Jersey where they live. He spends long hours at the office himself.
"We just never plan to see each other during the week," she laughs.
When not on the road, Knox is on the phone checking leads, setting up appointments or poring over computer printouts of companies that meet requirements for listing on the Amex.
Those requirements are much less stringent than for the New York exchange, and many of the companies she visits are barely qualified.
An Amex company must have at least 400,000 shares publicly held; a Big Board company needs a million. Amex firms need 1,200 shareholders; the New York demands 2,000. An Amex firm must have income of $750,000 a year; a Big Board firm must make $2.5 million.
It takes more than one visit to convince a company to list. It often takes more than one visit just to see the right person.
"It doesn't do you any good to convince the chief financial officer that listing is in a company's best interest unless you can convince the chief executive, too. Sometimes you just have to keep making appointments until you get to see the top person," she says.
Once through the door, she is prepared with a pitch tailored to the specific company, and often armed with information company executives are unfamiliar with.
She shows top officers of a data-processing firm a list of seven brokers who "make a market" over the counter in the company's stock -- offer to buy and sell the stock to investors.
"I was surprised to see there were seven," she says.
So are the company officials. They never have heard of one of the market makers.
"That's one of the primary reasons for listing," she tells them. "Instead of worrying about seven market makers, there will be only one specialist."
At a stock exchange, there is only one market maker -- the specialist -- who coordinates buy and sell orders for a particular stock and who stands ready to buy or sell the stock for his own account if he cannot match up a sale. The specialist's dealings are monitored by the exchange.
In the over-the-counter market (and that's where nearly all stocks of companies she visits trade), market makers earn their income off the difference between what they are willing to sell a stock for and the lower price at which they are willing to buy it. Furthermore, if a stock loses them money, they can stop making a market.
"Yeah, that's right," the top officer of the data-processing firm tells her.
"I can remember when times were tough a few years back when only two or three market makers kept with our stock."
"Well," she interjects, warming up to her sales pitch, "that makes it hard for your current shareholders and it also makes it hard for new shareholders to learn about your stock and buy it. And our specialist has to trade your stock. He can't drop it."
She points out that the difference between buy and sell offers from market makers in his stock is 75 cents a share. She says that large a spread discourages trading.
"That spread will narrow if you list. On the Amex there is an average of 8.1 cents a share variation between trades," she says.
Not only that, she says -- saving her final point for a growing company that soon may need new sources of cash -- the costs of selling new stock or issuing debt securities are usually lower for exchange-listed firms than for companies whose stocks are traded over the counter.
She leaves the data-processing firm, with the chief executive promising to talk the matter over with members of his board of directors to "see what they think."
That was the same farewell she received from the technology company president who was upset about speding $21,000 to join an exchange.
"Oh, I've got a good feeling about that one," she says. "It'll take a while to convince him, but he should be listed. His trading volume is 10,000 to 15,000 shares a day."