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MICROWAVE ASSOCIATES. INC. is one of that majority of Route 128 companies that ring up the bulk of sales from products conceived just yesterday. Of Micro-wave's 400 electronic devices, 80% are less than two years old. To get some of them, energetic President Dana Atchley Jr., 41, played a favorite 128 game: capture the scientist. Last year Atchley heard that Bell Laboratories had developed a type of semiconductor called the varactor, which amplifies microwave frequency signals and does it with exceptionally low background noise. Atchley wooed one of the key developers of the varactor. Dr. Arthur Uhlir, with stock options and Route 128 living, built a scientific team around him, boosted sales to $6,500,000 a year. The varactor has accomplished some of the most advanced feats in space-age communications, and scientists are working toward using it as an oscillator that could speed up computers 1,000 times.
Lure of the Option. It is common for scientists to leave giant companies or great universities to join one of 128's spunky newcomers. The stock option holds a particular attraction, as does the chance to participate in some bold, new project at a decision-making level. "Smaller companies can offer participation which the big ones give only to top executives," says Microwave's Atchley.
Generous options and explosive growth have provided many a scientist with a chance to become independently wealthy for the first time in his life, have made millionaires out of some Route 128 scientists. Itek's President Leghorn, together with three other Itek executives, acquired 81,040 shares of the company for $136,880 during the past two years; now these shares are worth more than $3,200,000. Shares of other companies on 128 have also scooted up. Compared with their 1957 lows, Raytheon moved from 16| to 575 last week, Polaroid from 30 to 150½, High Voltage Engineering from 17 to 60. In 1959 alone, Microwave has zipped from 5 to 22, Farrington Manufacturing from about 12 to 74.
Remarkable Offspring. These orbiting prices also smooth the road to merger. With the price of each share so high, a 128 firm can acquire another company by swapping only a comparatively small number of shares. Thus it can expand without great dilution of its stock. Merger partners are not scarce because many companies want a toe hold on 128. "When you are in Boston," says one 128 executive, "your stock sells for around ten times earnings. As soon as you move to the highway, these bankers cruising up and down discover you, and you're selling at 40 times earnings. That's almost enough to make you move right there."