Shop At Home Shares Plunge as No Partnership Reached
Nashville, Tennessee, Feb. 10 (Bloomberg) -- Shares of Shop At Home Inc., the third-largest U.S. home-shopping specialty retailer, fell as much as 36 percent after the company failed to announce a partnership with an Internet directory.
The shares fell 5 to 15 in early afternoon trading of 12.4 million, making it the fourth-most active stock in U.S. markets. Earlier, shares touched 12 3/4. The stock more than tripled in a month before falling 33 percent yesterday.
Shop At Home shares had surged on optimism that the company, which sells electronics, jewelry and other goods on TV and online, would team with a top Internet directory such as Yahoo! Inc. to boost its sales on the global computer network. Instead, Shop At Home said it will open a Web site to compete with online auctioneer eBay Inc., disappointing some analysts and investors.
''It's a letdown to some degree,'' said John Ray, president of Legacy Asset Management Inc. in Atlanta, who rates Shop At Home ''strong buy.'' ''There will be some knee-jerk selling of the stock.''
USA Networks Inc., which owns No. 1 home-shopping specialty retailer Home Shopping Network Inc., yesterday agreed to acquire No. 3 online directory Lycos Inc. USA plans to expand its presence on the Internet by combining Lycos with its home- shopping, ticketing and online businesses.
Shop At Home hopes to ally with an Internet directory company soon, said Kent Lillie, president and chief executive. He said the Nashville, Tennessee-based company has had talks with Internet companies about an agreement.
Collectibles.com
The company said it will use software from Oracle Corp. and closely held Internet services company iXL Inc. will construct the www.collectibles.com site, selling items from jewelry to Beanie Babies. Collectibles generate 80 percent of Shop At Home's sales, the company said, primarily from its broadcast network.
''We intend to do auctions,'' Lillie said. ''We plan to set up a community for collectors with chat rooms and customization as the site learns your interests.''
The company said the collectibles site will start running later this year.
Shop At Home also said it had a loss of $442,000, or 2 cents a share, in its second quarter ended Dec. 31, compared with the 1- cent average earnings estimate of three analysts surveyed by First Call Corp. The company had net income of $756,000, or 5 cents a share, a year earlier. Revenue soared 71 percent to $39.5 million from $23.1 million.
Shop At Home shares began trading on Nasdaq's National Market System today, moving from the Nasdaq SmallCap Market.
Shop At Home reaches more than 60 million homes each day through 200 television, cable and satellite stations.
Tele-Communications Inc., the second-largest U.S. cable company, owns No. 2 home-shopping specialty retailer QVC Inc.
12:36:59 02/10/1999
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