Huizenga's ZixIt Investment Reunites Blockbuster Buddies
By ANNE BRADY
PHOENIX -- Thursday's announcement that a group headed by H. Wayne Huizenga will invest at least $20 million in ZixIt
Corp. (ZIXI) will mean the reuniting of two men who joined forces in a similar way years ago and made a go of Blockbuster
Entertainment Corp.
The one stock analyst who actively follows ZixIt thinks this new teaming of former Blockbuster Chairman and Chief
Executive Huizenga with Blockbuster founder David Cook, now chairman and CEO of ZixIt, is another big success story in
the making.
Huizenga, chairman of several NYSE-listed companies, will become vice chairman of the board of Nasdaq-traded ZixIt,
based in Dallas.
"If there was any credibility gap left with the company, it's gone," said David Weinstein, director of institutional research at
Joseph Charges & Associates Inc. in Boca Raton, Fla. "He (Huizenga) certainly has contacts at high levels."
He noted that Huizenga similarly invested money in Blockbuster when Cook was starting out the video-retail business and
after short sellers hammered Blockbusters' IPO. Blockbuster was sold to Viacom Inc. (VIA VIAB) in 1994 for $8.5 billion.
However, analyst Otis Bradley with Gilford Securities in New York, who dropped his coverage of ZixIt last year, said he
remains largely unimpressed with the company.
"They're trying to make sure everybody thinks this is important, but I've talked to many people with very mixed emotions
about Huizenga," said Bradley. "I haven't been recommending ZixIt for some time. ... Nothing has happened that's going to
get me excited about it again."
A lot of investors seemed to get excited Thursday morning when ZixIt officially launched its new product, ZixMail, which is
used to send and track secure, encrypted documents and messages via e-mail. Shares of ZixIt traded up 14 1/8, or 22.9%,
at 75 7/8 Thursday before the company halted trading.
Bradley said a better technology that ZixIt has is ZixCharge, a shopping portal and Internet payment-authorization system.
But that product is still in development.
ZixIt stock has a very volatile history, with a 52-week high of 90 on May 24 and a low of 12 1/4 one year ago. Weinstein
says part of that volatility is due to the involvement of short sellers. Bradley said the stock is traded based on rumors.
Weinstein speculated that trading may have been halted Thursday over concerns that the Huizenga news was leaking out
prior to its official announcement.
Huizenga also founded Waste Management Inc. (WMI) and owns the National Football League's Miami Dolphins franchise.
His investment group will buy up to $44 million worth of ZixIt common stock through a private placement, ZixIt announced.
A spokesman for ZixIt said he didn't know what the nature of Huizenga's involvement in ZixIt will be, how the company will
use the proceeds of the investment or why trading was halted.
-Anne Brady, Dow Jones Newswires; 602-258-2003 |
