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 : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Rajiv who wrote (15565)	11/18/1998 10:49:00 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 18691

Rajiv, many thanks for the heads up. Maybe a reverse (buyin-) dump and pump?? Dump shares, and secretly park it. then pump and make No Short again / er even No Margin and then... Buy in. Snap! ToxiC.

To: Rajiv who wrote (15565)	11/18/1998 2:40:00 PM
From: Don Westermeyer	Respond to of 18691

Here is some snippets from Briefings view of KTEL: trading.etrade.com <Talks about listing requirements...> Did the Internet Kill K-Tel? K-Tel used to be a profitable company. What happened? All we can deduce, at this point, (at the time of this writing, no one at K-Tel is available for comment), is that the increased focus on the Internet has just about killed K-Tel. The "K-Tel Express" has been a big failure. K-Tel states in the 10-Q "Revenue generated from K-Tel Express through September 30, 1998 has not been material." Translation: Probably close to zero sales. We don't know how much the company spent developing the K-Tel Express site, although the press release stated that the ecommerce effort lost $600,000 in the most recent quarter. Revenues fell in this quarter to $18 million from $25 million a year ago, as advertising and G&A combined increased to $11.5 million from $8.9 million. The company blamed the shortfall on closing unprofitable infomercial and retail video efforts. But the Internet was supposed to more than make up for this, and it hasn't. If K-Tel had any kind of significant revenues from the Internet, you can bet they would be trumpeting them. The silence tells it all. Delisting looks like the least of K-Tel's problems, however. Although they have accounts receivable of $14 million, and inventory of $7 million, both are pledged to lenders as collateral. How they will pay their loans, or otherwise satisfy the lenders, is totally unknown. Especially since they just added a $900,000 additional liability to their balance sheet (a guaranteed minimum royalty to Playboy Enterprises for co-branded music CDs; to be paid over two years.) K-Tel needs more than $4 million in tangible assets quickly to stay listed on the Nasdaq. They can't borrow it, because any increase in assets would be offset by the corresponding liability. But Briefing estimates they need almost this much simply to stay liquid as an ongoing concern, as their cash flow statement shows a burn rate of $1.9 million a quarter. Maybe they can get Chairman Philip Kives to buy some stock. After all, he sold over $37 million worth of K-Tel stock between May 11 and June 9, of this year, at prices ranging from $32 to $11.