I bought some CUST at 5 1/2 after getting the following e-mail (and after confirming their cash position).
Dennis
Date: Tue, 10 Nov 1998 11:14:47 -0800
To: internetstockreview@sparklist.com
From: Internet Stock Review Online <indexao@pipeline.com>
Subject: CustomTracks (CUST) $4.75
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Internet Stock Review Online, Tuesday 11/10/98 letter.
Los Angeles 51...70 Sunny.
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Is Something Brewing At Custom Tracks (CUST) $4.75 ?
...or what's wrong with this picture.
Well, here is the FIRST in our series of undiscovered music/internet related companies that we promised 40 days ago. We will be adding (maybe) six music/internet stocks to the Watch List in the coming weeks.
Things have been hot today for this sub-sector of the Internet. CDNow (CDNW) is up 37% and it's merger partner N2K (NTKI) is up 50%. And of course K-Tel (KTEL) is screaming, up 76% on news of it's getting on Microsoft's Shopping Channel.
Now, who the heck is CustomTracks and why have you never heard of them. First, what they are not. Although we would like them to be, they are not (yet) a client of Perry & Co the parent company of ISR.
CustomTracks was Amtec (a company founded by David Cook, Ross Perot and Kenneth Anderson) back in 1989. David also co-founded Blockbuster. What they used to do is un-important to us. What is important is that they are getting out of the old business (officially today) and the proceeds after the sale is completed will result in the company having, get this, $80 million in cash or equivalents including allowance for payment of transactional costs.
That is equal to $5.36 per share in cash. Ohhh my. Oh and no debt.
Now..here is the hard part. What are they going to do with all that cash? We spoke to Beverly Fuortes at the company and she said that they are:
A). Getting into the Internet music business.
B.) They plan to offer customized CD's.
C). They need to acquire rights to music (to have a selection to make your custom CD).
D.) They want to create a library of music.
E.) They will make money by selling these custom CD's that they make for you.
Vague to say the least. So sorry. But what are you going to do. Probably the most important thing to look for is there signing agreements (hopefully) with some major record labels. If you want more info call Beverly Fourtes at 972-702-7057. Tell em we sent ya.
Joseph Charles & Associates also did a one page write up. Call Doug Friend to get a copy at 800-284-9995.
One last thing. The insiders have been buying the stock*.
CEO David Cook**
25,000 $6.28 - $6.31 7/31/98
39,000 $4.63 - $6.44 6/11/98
VP Ronald Woessner
6,716 $6.25 - $6.44 7/27/98
6,000 $4.69 - $5.19 6/2/98
18,500 $4.59 - $4.75 5/20/98
President John Wilson
16,000 $4.00 5/15/98
VP Stuart Evans
30,000 $3.00 6/6/98
20,000 $3.83 - $3.88
Director Antonio Sanchez
962,700 $3.66 - $3.70
*Figures from a Joseph Charles report dated 9/22/98
** David has been granted options to buy 4 million shares at $7.00
Begin your due diligence here:
CustomTracks
Beverly Fourtes
972-702-7057
One Galleria Tower
1334 Noel Road, Suite 1555
Dallas, Texas 75240-6604
mailto:invest@customtracks.com
stockprofiles.com (one of our competitors)
Profile
biz.yahoo.com
News
biz.yahoo.com
Chart
stockmaster.com
SEC Filings
sec.yahoo.com
Volume
stocktools.com
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Reality Check by Larry Dignan. "Greed and Speculation Make Comeback."
Inter@ctive Investor.
zdii.com
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Regular letter will be out tonight.
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