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 Briefing.com 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.