Up Front: IPO TURKEY SHOOT
A CRIMSON TIDE OF INK
MOVIEFONE INVESTORS ARE not exactly dialing for dollars lately. Since the theater-and-showtimes phone service went public in May, 1994, its stock has lost more than half its value, recently trading at 43/8.
One problem is that the New York-based company has continued to run red ink as it expands. MovieFone used the $28.5 million proceeds from the initial public offering to expand from 10 to 25 major markets, a costly endeavor.
Mostly, however, CEO Andrew Jarecki thinks Wall Street doesn't understand the way that the company makes money. When people dial MovieFone--777-FILM in many places--the call is free. The bulk of the revenue comes from a 30-second ad for flicks that people must listen to before they get what they called for.
Jarecki is sure a summer of hit films will make the quarter that ended on June 30 profitable, pleasing the stock market. If so, call it fade to black. EDITED BY LARRY LIGHT, WITH OLUWABUNMI SHABI