Forget junk bonds. These days, financier Michael Milken is making his money from the boom in Internet stocks.
The former "junk-bond king" is a general partner of a group that is the second-largest stockholder in 7th Level, whose shares leaped 7.4375, or 410 percent, to 9.25 today--one of the day's leading percentage gainers. The shares rose on news that 7th Level's character-animation technology would be distributed by WavePhore, which has been working with Microsoft to push content to home PCs through a wireless network.
According to a regulatory filing last week, Milken is a general partner in Entec Associates, which is listed as 7th Level's second-largest stockholder, with an 8.3 percent stake. Entec holds more than 1 million shares, gaining more than $7.4 million in value in one day alone.
"Michael R. Milken is a general partner of Entec, and the company believes that Mr. Milken has sole investment power with respect to, and may be deemed a beneficial owner of, the shares held by Entec," the filing added.
A 7th Level spokeswoman confirmed this information but declined to say anything more. Milken was not available for comment.
Milken, who served time in prison for violating securities laws, was dubbed king of junk bonds for a controversial investment strategy that became a symbol of Wall Street greed in the 1980s. But Milken also has a faithful following, those who appreciate his investment acumen and charitable contributions. (Milken and Oracle chief executive Larry Ellison are investors in Knowledge Universe, an educational software company.)
7th Level went public October 1994 at $10 per share. The company develops and distributes entertainment software, such as "Monty Python and the Quest for the Holy Grail," and has alliances with Disney, Sony, and Viacom, among others.
It wasn't the only Net stock than gained ground today. K-Tel continued its phenemonal run-up. The stock rose 2.25 to 43.875, a 5.4 percent gain. K-Tel is trading at record highs since it announced a plan two weeks ago to sell records via the Net.