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.

Microcap & Penny Stocks : FAMH - FIRAMADA Staffing Services -- Ignore unavailable to you. Want to Upgrade?

To: George R. who wrote (13236)	4/21/1998 7:21:00 PM
From: Mark[ox5]	Respond to of 27968

Part 2: The explosive move in shares of music distributor K-tel (Nasdaq:KTEL - news) over the last week, from below $10 to today's close of $43 7/8 is similarly bizarre and calls to mind the 1995 run-up in the share of Zenith (NYSE:ZE - news) on cable modem hype. Like Zenith, K-tel is a company that everyone remembers, which some take to mean that there is a vibrant brand name to lend credence to the story. Maybe so, but to hear from an analyst initiating coverage of K-tel with a "strong buy" rating because of its successful history of music retailing, I would just point investors to K-tel's stock chart. Outside of this week's manic run-up, the company has built zero shareholder value since starting to trade as K-tel in 1993. The Internet doesn't build the market for music. It may expand it for that marginal buyer who doesn't order things over the telephone or who is an impulsive buyer while sitting at the computer, but it's not a whole new world out there. K-tel is far behind the curve and already operates in a medium where advertising costs are a fraction of what the Internet advertising costs and where operating costs per order -- for a person sitting at a phone with an X-terminal computer -- are lower than putting in Alpha servers, running a T-3, and paying out the ying yang for exclusive marketing agreements.