<OT> 11/24/99 - Detroit Free Press Susan Tompor Column
Nov. 24 (Detroit Free Press/KRTBN)--A MONSTER STOCK TO OWN: If only our little Pokemaniacs had begged us to buy stock
instead of trading cards.
The sensational stock story of 1999 isn't America Online Inc., up 140 percent from its January low of $35.11.
It isn't Qualcomm Inc., the talk of telecommunications. Qualcomm posted a 1,589-percent gain from its January low of $22.20.
No, the real story is a Pokemon play. The star is 4Kids Entertainment Inc., which shot up 3,243 percent from its January low of $2.67 a
share to its 52-week high of $89.25 a share Nov. 8.
Never heard of 4Kids?
Your mesmerized kids can tell you that 4Kids brought the Japanese Pokemon characters to the United States. 4Kids holds the
exclusive licensing rights for Pokemon merchandise outside Asia.
Parents, grandparents, uncles and aunts know what Pokemon means. Pocket Monster. Or the menace that will pick our pockets of
more than $1 billion this year -- not counting gas money.
Children can easily spend $75 to build a decent collection of Japanese trading cards. Some spend hundreds of dollars. After all, the
cute, yellow Pikachu is but one of the more than 150 Pokemon species.
No wonder you need to drive all over town to track them down.
Of course, it doesn't stop with the trading cards. There are Pokemon backpacks, pajamas, stuffed toys, video games, lollipops and
toothbrushes. In all, there are 100 U.S. licensees.
Enter 4Kids, a small New York company with about 50 employees and $14.8 million in sales in 1998. It's so small, no Wall Street firms
track 4Kids.
In January, 4Kids was trading for less than $2.70 a share. By July 1, during the summer's Pokemon rush, the stock had climbed to
about $8.50. Pleasant, but nothing next to this fall's bonanza.
Adults soon turned as silly as kids chasing the elusive Charizard, a winged-dragon Pokemon species. Charizard cards can sell for $50
to $200 each.
4Kids bounced to $32 a share by late September, then it climbed to $85 a share by late October. Nov. 8, shortly before "Pokemon: The
First Movie" debuted, 4Kids closed its 52-week record of $89.25 a share.
Or, put another way, $1,000 invested in 4Kids in January would have bought you a minivan come November. Nov. 8, your investment
before taxes would have been worth more than $33,000.
Before you throw a Primeape-style fit -- an act of a Pokemon species -- think about this. Not every Pokemon strategy works.
Oh, sure, no parents would grumble if they bought stock in the Topps Co., which rolls out those lovable Pokemon trading cards. Topps
shot up 182 percent from its low of $4.19 a share March 10 to its high Nov. 8 of $11.81 a share. It closed at $10.25, unchanged,
Tuesday.
But Hasbro, which paid $325 million to market Pokemon toys, has been a dud.
Hasbro stock had shot up nearly 60 percent between January and May. Hasbro hit $36.50 a share May 3 -- the date folks lined up at
midnight to buy Jar Jar Binks, Darth Maul and other new "Phantom Menace" movie-related toys.
But the Star Wars hype was too much, and Hasbro stock has been falling ever since. It's essentially flat for the year. It closed at
$22.13 Tuesday, up 13 cents from the previous day.
"The Pokemon story is diluted with Hasbro," said John Taylor, toy analyst for Arcadia Investment Corp. in Portland, Ore.
4Kids shot up, he said, because it's a darling of day traders, who buy stock and sell stock the same day. When day traders play
around, watch out.
In the last two weeks, 4Kids has lost more than half of its value. It closed at $49.25 a share Monday, losing $7.75 a share in one day. It
closed at $42.25 Tuesday, down $7.
Who's going to buy the last Pokemon trading card? Who bought the last pet rock?
Chances are good, really good, that the Pokemon fad will come and go. And if you didn't enjoy the ride up, you don't want to be caught
on the ride down.
By Susan Tompor
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