Momentum Fuels Other Data Providers
Among those who are seeing the value of their Market Guide stakes balloon is
Mark Burka, a director of the company. He reached an agreement in February
with Chicago-based William Harris Investors Inc. to purchase from the firm
345,000 Market Guide shares for $3 apiece.
According to an agreement filed with the Securities and Exchange Commission,
Burka bought 150,000 shares on Feb. 6, another 45,000 on March 31, and will
buy the remaining 150,000 shares by June 30.
The contract also leaves William Harris the option of selling an additional
149,999 shares to Burka by Sept. 30, but with the current stock price, selling
more shares at the pegged price of $3 seems unlikely.
The shares Burka acquired, the filing said, were held by clients of William
Harris, which as of December 1997 had a 2.2% stake in Market Guide.
Burka declined to comment about the transactions and a William Harris
official was not immediately available for comment.
Other beneficiaries of Market Guide's upswing are financial information
companies.
Joel Krasner, an analyst with First Albany Corp., said the momentum Market
Guide is generating from its deal with America Online is boosting some
companies in its peer group, including PC Quote Inc. (PQT) and Telescan Inc.
(TSCN).
PC Quote shares were recently up 2 1/8, or 141.7% to 3 5/8; Telescan shares
were up 2, or 29.6%, at 8 3/4. Both stocks hit 52-week highs earlier Tuesday.
Krasner said Market Guide's America Online deal "really is having a positive
impact" on other companies in the sector because investors imagine that
high-profile deals could be in the cards for them as well.
Although Krasner said he was not privy to the particulars of Market Guide's
agreement with America Online, he said it represents "a significant revenue
opportunity."
Typically, he said, such deals are structured to provide a base payment to
the data provider, which would be followed by a sharing of any revenue
generated by visitors to the investment site where the data is featured.
An America Online representative was not immediately available for comment
on details of its agreement with Market Guide.
Despite the potential boost to Market Guide's revenue base, Krasner conceded
that the two-day stock inflation may be more than is warranted. "It is quite
possible that (the stock) may be ahead of itself based on the fundamentals to
date," he said.
Krasner noted, however, that an association with a big-name Internet company
like America Online makes investors go mad. "We're in a climate right now
where Internet stocks are the rage," he said. >>
(END) DOW JONES NEWS 04-21-98
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