Simmons sends Intertainment stock up the charts
SHIRLEY WON
From Wednesday's Globe and Mail
Published Tuesday, Apr. 19, 2011 7:09PM EDT
Last updated Tuesday, Apr. 19, 2011 8:34PM EDT
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Increase text size Gene Simmons, founder of the rock band KISS, has given shares of Intertainment Media Inc. (INT-X2.250.104.65%) a shot in the arm after becoming a pitchman for the Toronto-based firm’s social media and translation website.
Intertainment hit a 52-week intraday high of $3.35 a share Tuesday before sliding to close up 10 cents at $2.25. The company, which has reported no earnings and no significant revenue to date, has seen its stock gain a whopping 2,150 per cent this year.
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“It’s getting a little crazy,” says Peter Hodson, a portfolio manager at Sprott Inc. who bought Intertainment shares between 50 and 70 cents a share in early February.
There is “chatter” on the Street that Mr. Simmons plans to soon do a demonstration with his fans around the world on Intertainment’s Ortsbo.com site so “that is perhaps what is driving the stock,” Mr. Hodson said. “ I am not a big KISS fan, but Gene has been very entrepreneurial. He has turned a mediocre rock band into a worldwide conglomerate.”
Intertainment has gained $1.58 a share over 11 sessions after Mr. Simmons agreed to become a shareholder and also a promoter for Ortsbo. The website says it enables users to hold online chats in more than 50 languages, with immediate translation of their text messages.
The stock has gained momentum after the company announced earlier this week that it had achieved a “major milestone,” reaching 12.2 million unique visitors in less than 10 months.
“There may be some very large buyers who want a piece of this social media opportunity before it’s too late,” Mr. Hodson suggested. “But it’s exceptionally hard to value, and you don’t know how much money is going to be ultimately made down the road.”
Intertainment chief executive officer David Lucatch said that he convinced Mr. Simmons to get onboard earlier this year after persuading the entertainer, who couldn’t speak English when he emigrated from Israel to the United States as a boy, to try the site.
“Gene typed a message to one of my staff in Hungarian,” Mr. Lucatch recalled. “My staff member received it in simplified Chinese over Ortsbo. She typed it back in Spanish, and he received it in English … We were using four different dialects in a single conversation, and he was blown away.”
Hedge fund manager Steven Palmer of AlphaNorth Asset Management Inc. began buying shares of Intertainment at 5 cents a share through private placements as early as 2009. “It remains to be seen whether it will continue to grow at a rate comparable to Facebook,” he said. “That is what is getting people excited.” |
