Adatom.com soars on China deal
Adatom.com Inc. (Nasdaq: ADTM) mentioned the magic word "China" in a press release Thursday and saw its stock fly 32 percent.
The company formerly known as HealthCore Medical Solutions now calls itself "an e-commerce company reaching the business-to-business and business-to-consumer markets." After divesting its health care services operations in 1999 it merged with privately held e-tailer Adatom.com, adopting its name.
Shares were up 32 percent, or 2 1/4 to 9 1/4, trading heavy volume on the Nasdaq after the company said it had signed an exclusive agreement with the China Product Trade Net Center (CPTNC). The CPTNC is an organization supported by Chinese governmental institutions to ensure worldwide distribution of Chinese manufactured goods, and aims to use Internet technology as its primary information and distribution medium.
Adatom said it and the CPTNC will establish a joint venture company located in Beijing, China, to sell Chinese-made goods into the U.S. as well U.S. goods into China exclusively through Adatom.com.
The deal calls for the establishment of an electronic marketing, selling and distribution system which will be accessible in both English and Chinese. Additional support will be provided by subsidiary CPTNC organizations, the company said.
``With this joint venture Adatom will now have a totally vertically integrated 'electronic marketplace' for accessing and selling industrial and consumer goods and services to manufacturers, wholesalers, distributors, retailers and directly to consumers in both countries,'' said Adatom.com CEO and president Rich Barton in a release.
The implementation of this joint venture should take about 60 days based on the receipt of various Chinese business licenses, the company said.
Other Net-related stocks such as recent IPOs AsiaInfo (Nasdaq: ASIA) and UTStarcom (Nasdaq: UTSI) and China.com (Nasdaq: CHINA) have soared based on their ties to China.
Adatom.com competes with Buy.com (Nasdaq: BUYX) and Value America (Nasdaq: VUSA).