Cable television shows that market jewelry, appliances and other products, already popular with viewers, have become big hits on Wall Street.
Take Financial News Network, whose shares have nearly doubled in value this week. The Santa Monica company attributes the rise to its discussions with seven merchandising firms about a television show that would sell merchandise to home viewers by telephone. FNN's shares closed Thursday at $20, up $3.12 1/2, in over-the-counter trading.
FNN has been experimenting with home merchandising and expects to make a decision about whether to get into the business by June 20, Chairman and Chief Executive Earl Brian said.
Another beneficiary of the trend is COMB, an off-price merchandiser, whose shares closed at $63.87 1/2, up $4.87 1/2, in over-the-counter trading Thursday after soaring $14.50 on Wednesday. The increase in COMB shares came after Warner Communications said it would join with COMB and Tele-Communications, the nation's largest cable network firm, in a home merchandising venture.
The venture, Cable Value Network, was formed in May by COMB and Denver-based Tele-Communications. Under the proposed agreement, Warner--which operates the nation's sixth-largest cable network--would acquire a portion of Tele-Communications' interest in the venture and an option to buy a 9% stake in COMB.
But perhaps the most dramatic share rise was that of Home Shopping Network, a Clearwater, Fla.-based merchandiser that has offered a home shopping show since 1985. When it went public in May, its shares were offered at $18 apiece but closed at $42.62 1/2 on their first day of trading. On Thursday, Home Shopping Network closed at $76.75 on the American Stock Exchange.
These firms are vying for a share of a largely untapped market that cable-TV industry executives say could easily total $1 billion in annual sales.
"It might even be bigger than that," says Geoffrey Holmes, a Warner vice president. Holmes said Warner would contribute its expertise in programming to bring more excitement to the Cable Value Network venture.
Thomas Rauh, national services director for retail consulting for Touche Ross, says the home merchandising shows appeal to viewers because they offer a game-show brand of entertainment. "Live television and a bargain deal are really the keys to the concept," he said. "You never know what's coming up next."