K-Tel Shares Soar for Second Day on Internet Plans
Minneapolis, April 14 (Bloomberg) -- K-tel International
Inc. shares rose 45 percent after more than doubling yesterday on
the company's plan to sell 250,000 album titles via the Internet.
The direct marketer rose 6 11/16 to 21 5/8 in trading of 5.4
million, almost 300 times the three-month daily average. It was
the ninth-largest percentage gainer on U.S. exchanges. Earlier,
the shares reached 22 1/8.
The Minneapolis-based company, which announced plans for its
K-tel Express Internet site late Thursday, will compete with
online retailers CDnow Inc. and N2K Inc. starting May 1. To
promote the site, K-tel plans to tap the more than $30 million it
now spends on television advertising for its pop music
compilations, such as ''Club Mix'' and ''Hot Country.''
''We're well-positioned to gain market share as e-commerce
grows in the next few years.'' President David Weiner said in an
interview yesterday. ''K-tel is a well-known consumer brand with
high consumer recognition, both in the U.S. and abroad.''
Incorporated in 1968, K-tel pioneered direct sales of
musical recordings via television. It also sells videos,
housewares, exercise devices and automotive accessories.
Sales of entertainment products over the Internet are
expected to increase to more than $1.5 billion in 2001 from $138
million this year, Weiner said.
K-tel's revenue will rise to more than $100 million in its
fiscal year ending June 30, Weiner said. Last year, the company
had $75.5 million in revenue.
The Internet address is ktel.com
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