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The Times 100: The Best Performing Companies in California

L.L. Knickerbocker Co. : No. 1 on the Stock Price Gain 100

May 07, 1996|JAMES S. GRANELLI

Louis L. Knickerbocker figured he knew how to sell Marie Osmond dolls and other celebrity-endorsed collectibles, but he wasn't so sure he could promote his operation as a publicly traded company.

Underwriters bought the stock of L.L. Knickerbocker at $10.50 a share but Wall Street quickly dropped the price to $5 on its first day of trading in January 1995. The price lagged for months, falling as low as $3.625.

But the stock rocketed once controversial trader Rafi M. Kahn began buying shares in late June and hit $52 a share during trading in August. Khan and other investors were optimistic about Knickerbocker's ability to strike deals with celebrities and sell products through home-shopping television programs.

The sudden interest helped to make the Rancho Santa Margarita distributor the biggest stock gainer--at 1,148% during the 52 weeks ended April 19--of all publicly held Orange County companies last year.

Khan's involvement, however, also put the company under scrutiny. Both the Securities and Exchange Commission and the National Assn. of Securities Dealers, which runs the computerized Nasdaq market system, called the company to find out what executives were telling investors.

After a 5-for-1 split, the stock closed the year at $8.25, or a pre-split equivalent of $41.25 a share. It traded last week in the $9 to $10 range.

Knickerbocker has said his company's goal is to reach annual sales of $1 billion, but it has a long way to go. Last year, sales reached $13.1 million, and the company earned $1.3 million.

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