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Technology Stocks : K-Tel (KTEL) Have the cheesy '70s records come to an end? -- Ignore unavailable to you. Want to Upgrade?

To: MR. PANAMA (I am a PLAYER) who wrote (2648)11/13/1998 2:27:00 PM
From: Winter  Read Replies (1) | Respond to of 3203
From 14:00 ET ******

K-TEL INTERNATIONAL INC. (KTEL) 21 3/8 -6 5/8. It looks like despite the various spins this marketer and distributor of music albums, compact discs, and cassettes has issued during the
past several months, it just can't grow earnings on a consistent fashion. To its credit, K-tel has managed to boost its stock price through carefully worded press releases announcing the latest and
greatest marketing and distribution association with some major market players. This week alone, it has issued two well publicized e-commerce releases that have allowed the stock to surge from
last Friday's close of $10 5/16 to a week high of $32 5/8 on Wednesday. While, under most circumstances, investors should know that press releases don't amount to much unless they translate into
sales and earnings, with the momentum game back in full bloom, investors have been quick to jump on the stock before fully reading the latest company promotion. A sobering fact, however, is that
the company lost money in the period ended in September as revenues plunged 28% due to the curtailment of its third-party media-buying operations. This is not a very good way to start the new fiscal
year as in three of the past four years, K-tel has lost money while revenues only grew by 13.4% in fiscal 1998 after lagging in the mid-single digits the prior three years. Not exactly a trail-blazer, but
then again, most investors knew that before getting into the stock and paying a significant premium to be part of the momentum game right? No need to point out that the stock is off more than 23%
today on the disappointing earnings report. Then again, you can almost count on the company issuing another e-commerce deal soon enough that should get investors salivating all over gain. Plavov
could not get his dog to do better tricks than K-tel can from investors who just keep lapping up the stock on command.