Cyberian Outpost shares soared Tuesday after the online computer equipment retailer teamed with CDnow and other online sellers to form an online mall and after BT Alex. Brown repeated its "strong buy" rating.
Shares rose 19 1/2, or 78 percent, to 44 1/2 on volume of 13.7 million shares, in recent trading.Shaun Andrikopoulos, an analyst in BT Alex. Brown's San Francisco office, said Monday's launch of ShopperConnection introduces a new concept in online retailing. "We believe this is the dawn of the meta-network," Andrikopoulos said in a research note. "The potential customer base ... of the shopping network is bigger than any one player could capture on their own, including Amazon.com."
First announced in October, the shopping network allows customers to shop and click from one member's site into the ShopperConnection hub, and then jump onto another partner's site. In addition to Cyberian Outpost (COOL) and CDnow (CDNW), the network includes Datek Online, eToys, Garden.com, PC Flowers & Gifts, Preview Travel (PTVL), Reel.com and Virtual Vineyards.
The shopping network could give the nine partners "a lot to gain with little to lose," Andrikopoulos said, particularly in increasing the customer base. Assuming that there is a 25 percent visitor overlap from the nine different sites, the network could have more than 7 million visitors. Cyberian Outpost alone has about 160,000 customers.
In separate news, Cyberian Outpost aired the first of a two-part television and print campaign last week. The TV ads feature an artilery cannon firing gerbils at a wall.
CDnow stock added 7/8 to 14 3/8 in early afternoon trading Tuesday.
Written By Khanh T.L. Tran