SkyMall CEO buys out shareholders
On a day when the NASDAQ hit an all-time high, the in-flight catalog retailer falls 25 percent on news that its CEO bought out three major shareholders at a steep discount.
SkyMall was among the most active NASDAQ stocks today as that index hit an all-time high on 1998's final trading day, climbing 25.75 to 2192.71. SkyMall fell 6.875 to 20.875 on trading of 3.84 million shares, more than four times its average volume.
Chief executive Robert Worsley sold 675,000 shares on Monday at an average price of $35 in order to exercise long-held options to buy out his two primary financial partners, the company said. Worsley now owns 54 percent of the company's outstanding common stock, or 4.6 million shares.
Worsley bought the 2.4 million shares held by company co-founder Alan Ashton and his wife, Karen, for $7.35 each, or $17.6 million. He also paid 6.75 each for 518,000 shares held by Bert Getz, chairman of Cincinnati-based Globe. The buyout agreements were signed October 15, the company said, and agreed to in principle before the company's 1996 IPO.
"Better lucky than smart,'' said analyst Keith Benjamin at BancBoston Robertson Stephens. "There's no way the fundamentals of SkyMall's Internet business could sustain Monday's inflated valuation, so he was smart to sell into the rally."
SkyMall shares nearly tripled Monday when the company said it expected its Internet sales for the year to increase sevenfold.
Among other tech and Internet-related stocks that moved today, Lycos rose 2.1875 to 55.5625 after the No. 3 Internet directory announced it's creating a Web site for the National Football League's Super Bowl, an alliance that could result in millions of dollars in revenue for both parties. Lycos declined to disclose the terms, though it expects the venture to be profitable.
Data Broadcasting Corporation was among NASDAQ's most active, rising almost 25 percent or 3.5625 to 17.8750. The financial data provider climbed on optimism for January's planned spin-off of its MarketWatch.Com financial Web site, a joint venture with CBS. Both companies will own a 38 percent stake of MarketWatch after the offering, which is expected to sell for between $10 and $12 a share.
Quest Net rose for a third day, closing at 10.125 up 0.6250 after trading as high as 14.50. The ISP said it acquired domain names and certain assets of closely held Grupo Internet Latinoamericano SA for $2 million.
Electromagnetic Sciences fell 2.125 to 14 after trading as low as 10.25 on news the maker of wireless communication systems cut 10 percent of its workforce, or about 120 jobs, in the fourth quarter. The firm said earnings for the quarter will be "near break-even" because of delays in orders.
Another wireless firm, P-Com, rose 0.4844 or 14 percent to 3.9844 after saying it received orders worth more than $2.9 million from a German firm.
Internet-based database company ExperTelligence rose for a second day, up 1.25 or 14 percent to 10 after it unveiled an auction comparison feature that allows users to compare similar items.
Carv.com rose for a second day, closing up 2.625 or 16 percent to 18.625 after trading as high as 23. The maker of surfboards, skateboards, snowboards, and other sports equipment will have one of its Web sites listed on Buyitonline.com'ssearch engine.
Citron rose 1.625 or 65 percent to 4.125 after the company said it plans to market sexual stimulant creams and snoring remedies through its Web sites, adult entertainment Web sites, and sites in related industries.
Bloomberg contributed to this report.