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K-Tel Falls for Second Day as Company Faces Nasdaq Delisting
K-Tel Falls for Second Day as Company Faces Nasdaq Delisting
Calabasas, California, Nov. 18 (Bloomberg) -- K-Tel International Inc. shares plunged for a second day after
the music retailer was told that it fails to meet a key requirement for trading on Nasdaq's national market and
faces delisting.
Calabasas, California-based K-Tel, known for its late-night TV ads pitching the Veg-O-Matic and music titles
such as ''Hooked on Classics,'' fell 2 to 10 in trading of 3.06 million. Earlier, shares touched 8 3/4, a 27
percent drop, after sliding 32 percent yesterday.
K-Tel said yesterday that it received a warning letter from the Nasdaq last month saying that the company
didn't meet its tangible net asset requirement. Nasdaq requires at least $4 million in net tangible assets, or
assets excluding goodwill minus liabilities. K-Tel said its level is about $1 million. ''Nasdaq should be
watching how this stock is trading. The only people who are going to get damaged is the public,'' said analyst
Axxel Knutson, head of Axxel Institutional Services. ''There's an awful lot here that smells.''
K-Tel shares have been swinging wildly since the company entered the online retailing business in April. As
of yesterday, K-Tel is down 65 percent from its record high of 33 15/16, reached four days after starting the
Web site ktel.com. Analysts think K-Tel ran up on Internet speculation and its low net assets and possible
delisting signals more fundamental problems. ''I don't want to be associated with this stock,'' Knutson said.
He had a ''sell'' rating on K-Tel before he dropped coverage.
K-Tel has a hearing scheduled before Nasdaq in January to try to get a temporary extension to the
requirements and raise additional capital to meet them, said Lawrence Kieves, who was named president in
October after President David Weiner left in September.
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