K-Tel Stock Soars 45% as News of Plan To Sell Music Over Internet Proves a Hit
K-Tel International Inc., long known for peddling music on late-night television, has another hit on its hands: K-Tel stock.</br></br>Early last week, the company's shares changed hands at less than $7 a share. But with word spreading of the company's plans to sell music on-line, K-Tel shares have marched steadily higher. After gaining more than $22 last week, K-Tel shares were up another $12.9375, or 45%, yesterday in Nasdaq Stock Market trading, closing at $41.625.</br></br>Before the company's announcement less than two weeks ago of its plan to sell music over the Internet, K-Tel had so little attention that its shares didn't even trade on some days. With just 4.1 million shares outstanding, K-Tel's market capitalization has gone from about $30 million to $170 million in a week.</br></br>Yesterday, the stock's volume was an astonishing 14.2 million shares, or more than three times the number of shares outstanding. Analysts said traders who had sold K-Tel shares short, betting on a decline in the stock price, were among the buyers in recent days.</br></br>All this for a company that in its year ended June 30, posted net income of $3.2 million, or 81 cents a share, on sales of $75.5 million.