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.

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