Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: Mama Bear who wrote (52076)	2/24/2000 10:54:00 AM
From: StockDung	Respond to of 122087

Insiders selling MP3.com uniontrib.com By Mike Drummond STAFF WRITER February 23, 2000 Dogs sometimes grow edgy and bark before earthquakes. Rats scurry from sinking ships. And jittery insider investors are known to sell at deflated prices. Such may be the case at MP3.com, San Diego's Internet music provocateur currently embroiled in a massive copyright lawsuit. This month alone, two individual inside investors and one institutional insider filed to sell shares of MP3.com, even as the stock price dipped below July's initial public offering of $28. The insiders -- defined as shareholders who have the most knowledge of the inner workings and future prospects of a publicly traded company -- filed intentions to sell 124,551 shares valued at $3.9 million, making February the busiest sell-off month in MP3.com's young public history. "That's not a good signal at all," said Bud Leedom, editor of the San Diego Stock Report. Insiders such as executives, institutional investors and friends and associates are allowed to sell shares during certain times. It's understood when insiders take advantage of the window to reap some profit during good times. However, insider selling when a stock is in decline -- particularly when a company is battling a major lawsuit -- sends a negative message. "It says, 'I better get out now,' " Leedom said. On a bad day for many tech stocks, MP3.com shares closed at a new 52-week low yesterday at $20.433/4, down $2.561/4. Karen Silva, director of MP3.com's investor relations, acknowledged that this month's insider selling is "unfortunate," but quickly added that none of the senior executives has sold any shares. MP3.com insider Judy Brandon filed an intent to sell 1,500 shares at $26.50 a share earlier this month, while fellow insider and company co-founder Lars Peter Mathissen filed to sell 50,000 shares at $28.50 a pop. Institutional investor GC&H Investments filed its intent to sell 73,051 shares at $29.621/2 a share. MP3.com's stock bolted from the chute last summer, climbing to more than $100 before closing its first day at about $63 a share. It has since lost its luster and began a noticeable descent last month after the Recording Industry Association of America filed a potential multibillion-dollar copyright lawsuit against MP3.com for launching a service that allows people to access their CD collections online. The recording association says MP3.com violated copyright law by copying more than 45,000 CDs to a database for commercial use. MP3.com responded by filing its own lawsuit, accusing the recording association of defamation and trying to harm its business and stock price. MP3.com made a name for itself by attracting thousands of unsigned musicians to post songs on its Web site, offering some tunes for free download while selling CDs. The company makes the vast majority of its money through selling advertising. Leedom said the uncertainty created by the lawsuits does not help a company that's trying to defend an unproven business model. Yet Leedom noted that MP3.com "has a ton of cash," and is generating more every day. The company reported record revenue last year of $15.2 million and narrowed losses last quarter. MP3.com says it expects to begin making a profit next year. "This company is not going away anytime soon," Leedom said. This would explain the continual downtrend. Jack