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Technology Stocks : PTET - Platinum Entertainment...the next KTEL??? -- Ignore unavailable to you. Want to Upgrade?

To: Don Hess who wrote (53)	12/2/1998 10:40:00 AM
From: Igor Borodine	Respond to of 167

Herb on TheStreet: Can Blockbuster's Founder Do It Again on the Internet? By Herb Greenberg Senior Columnist 12/1/98 6:30 AM ET What was behind yesterday's 21% rise in CustomTracks (CUST:Nasdaq)? More important, what is CustomTracks? Good question, considering that with last week's announced sale of its CardkeySystems electronic securities division, the company has no revenue-generating operations. So, what does it have? In the very least, a great story. (No reason to buy a stock.) If all goes well, it has a potentially lucrative business (assuming it can execute well). The clear hook here is the CEO, David Cook, who founded Blockbuster Video before selling off the company to Wayne Huizenga. Cook doesn't draw a salary; instead, he's paid in stock options that have a strike price of $7. With yesterday's close of 8 3/4, he's well in the money, but it doesn't appear he has any intention of selling -- at least not yet. Cook's plan, according to the company's SEC filings, is to create a "digital data distribution business, with a focus in the music arena." More specifically, the company has, without fanfare, hinted that it intends to get into the business of allowing consumers to make custom CDs over the Internet. According to CustomTrack's 10-Q, it's currently "pursuing digital music content rights and, additionally, is evaluating other music-related Internet business opportunities." Beyond that, though, Cook, who was 46 at the time of the company's last proxy in June, is hesitant to say anything. In a brief telephone interview yesterday (he picked up his own phone, clearly not expecting to find a reporter on the other end), Cook said at least three times that he doesn't want to discuss the company's plans until he has something to discuss because he doesn't want to "hype" the stock. "I want it to trade on its value not its Internet hype," he said. He did say, however, that he should have something formal to announce in about 60 days. And he made it clear that the company's primary goal is to go "well beyond" customizing CDs and that it will have nothing to do with the general online business of retailing CDs. In the meantime, raising cash won't be one of CustomTrack's problem. In the past year it has been selling off a string of businesses. If the sale of its electronic securities division is completed, the company will have no debt and around $5.35 per share in cash. Sounds great on paper, but so do all of the rest of those online wannabes. If nothing else, give Cook credit for trying to distance himself from that pack.