I know something about American Idol I bet most of you don’t know…behind the judges and scenes, the budding and floundering talent, behind the lights and cameras of the multi-billion dollar franchise is something that brings the pop-star hopefuls, the “King of Rock and Roll” and the “Greatest of All Time” together.
That “something” is CKX Inc. (NASDAQ: CKXE), a company founded in 2005 by CKX Chairman and Chief Executive Officer Robert F. X. Sillerman. CKX is engaged in the ownership, development and commercial utilization of entertainment content. The company owns the licensing rights to the name, image and likeness of Elvis Presley, the operations of Graceland and an 80 percent interest in similar licensing agreements of Muhammad Ali.
That same year CKX acquired 19 Entertainment from Simon Fuller, creator of American Idol for $200 million. The company owns a share of the rights to American Idol as well as its Pop Idol in Great Britain.
Priscilla Presley, among others, sits on the board as chairperson of Elvis Presley Enterprises.
Why haven’t you heard about CKXE? The entertainment industry is booming – why isn’t there a stampede of investors ready to cash-in on CKXE success? Based on information from the most recently filed 10K for fiscal year ended Dec. 31, 2006, the company has over $36 million cash-on-hand, a book value of $371 million, revenues of $210 million and a net income of over $7 million – it seems all the company needs is some star power … Oh, they already have that? Well maybe some street power to boot then.
The company has controlling interests in many media entities that have captivated the public eye, now the stock needs to captivate Wall Street analysts. The only three analysts covering the stock are Craig-Hallum, Cathay and Bear Sterns; CKXE could use a little more attention from some of the big boys. That could attract the attention to the stock that shareholders are looking for.
The company recently launched an advertising campaign to promote the longevity of Elvis Presley and to promote the brand status of Graceland. According to a press release the campaign will cross all media channels – from broadcast to billboards. But is the campaign to preserve the Elvis legacy or to toss the stock on the street?
Analysts estimate the company may pull in about $0.21 per share in 2007, $0.28 in 2008 and estimates growth at 162.5 percent this year. Though the company isn’t backed with much of an earnings history…it is backed by “The King” and “The Greatest of All Time.” Shares of CKX Inc. were trading at $11.23 as of Monday afternoon.
