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O.C. BUSINESS PLUS

Tickets.com Stock Bottoms Over Loss

Entertainment: The Costa Mesa company has a first-quarter shortfall of $21.6 million.

May 16, 2000|ROBIN FIELDS | TIMES STAFF WRITER

Tickets.com Inc., weighed down by one-time acquisition, marketing and infrastructure costs, reported larger-than-expected losses of $21.6 million, or 37 cents a share, for the year's first three months.

The news sent its stock to its lowest level, $2.15 a share, since the Costa Mesa event ticket seller went public in early November. It ended Monday's trading at $2.31 a share, down 13 cents.

The quarterly loss is more than three times the $6 million in red ink that flowed in last year's first three months. On a per-share basis, the company lost 95 cents in last year's first quarter as a privately held company. Sales more than doubled to $14.1 million from $6.6 million.

The latest loss also was 2 cents a share more than analysts had predicted.

While the company has more than enough cash--about $98.1 million--to stay in business and try to turn a profit in the next year, the results still may exacerbate the company's troubles on Wall Street.

Tickets.com's shares have dropped almost 84% this year, hurt by a market-wide shakeout among Internet retailers and a feud with industry behemoth Ticketmaster Corp.

Analysts, however, said the company's 114% increase in sales, bolstered by customers' increasing acceptance of online buying, should help the Orange County fledgling remain a viable challenger.

"I like the growth," said Patrick Winton, an analyst at E*Offering Corp. "I thought they'd only have about $10 million in sales."

Most promisingly, 34% of the company's first-quarter ticketing revenue came from online sales, up from just 6.4% a year earlier. A growing proportion of the 4,500-plus venues that sell tickets through Tickets.com or use its software are handling transactions online, company executives said.

The company said, for example, that it sold three of every five preseason seats to San Francisco Giants home games through its Web site.

"The Web momentum is growing," Chief Executive Tom Gimple said.

Electronic sales provide valuable information about customers that can translate into new revenue. Tickets.com executives said they used data gathered through online buyer registration programs, for instance, to help promoters maximize the gate for Saturday's Wango Tango concert in Dodgers Stadium.

Tickets.com, spawned by technology incubator Idealab in Pasadena and rooted in the software business, has emerged as Ticketmaster's main rival by exploiting its online savvy and by acquiring a series of regional ticketing operations.

Ticketmaster sued Tickets.com last year, alleging the smaller firm's practice of linking users to pages deep within competitors' Web sites for information on events it does not handle was unfair and deceptive. A judge ruled in March that so-called deep-linking alone, which skips most of the competitors' advertising, does not violate the law.

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