Ventura cows the short-traders; its shares drop below $1 anyway.

Ventura cows the short-traders; its shares drop below $1 anyway

Last October, when Ventura Entertainment Group Ltd. traded at $8.625 a share, Chairman Harvey Bibicoff, 51, lashed out at short-traders, analysts and news reporters who said or wrote that the producer of television shows and commercials was considered overpriced on Wall Street.

Skeptics of the North Hollywood-based Ventura noted the production company had a "market cap" - shares outstanding times share price - of $67.4 million, but reported a loss of $2.6 million on smallish revenues of $3.08 million in the truncated eight-month fiscal year ended June 30.

Bibcoff hated the "shorts," the short-traders who bet that Ventura's stock would go down.

"They are just trying to cut us off from capital, the lifeblood of any young company," Bibicoff fumed last October, at a breakfast meeting at Art's Deli in Studio City. "It's un-American."

Bibicoff last November filed a lawsuit against Mark Matheson, analyst at the Newport Beach-based Cruttenden & Co. brokerage house, who wrote a report in October that called Ventura overpriced and publicly called Ventura a "$1 stock."

The suit, which alleged a conspiracy by Matheson and others to drive down Ventura's stock, was settled out of court.

But by last week, Matheson had been proven right: Ventura traded below the $1-a-share range, at 87.5 cents bid in over-the-counter markets.

The market capitalization of Ventura has sunk to about $8.2 million.

Why the nosedive of Ventura? Bibicoff won't say. "You'll have to talk to a stock-broker why it's at $1 a share," said Bibicoff last week in a telephone interview that he terminated after one question.

One thing's for sure: Bibicoff's sue-the-short-traders strategy has worked, if not to raise Ventura's stock price, then to shut up Wall Street critics.

"I can't talk about Ventura," said analyst Matheson last week. "It might provoke another lawsuit."

Joe Feshbach, part of the famed Feshbach brothers short-trading outfit Palo Alto, said last week, "He (Bibicoff) sues short-traders, and I don't feel like pumping up my legal bills right now. I have no comment."

One Tinseltonian who will talk about Ventura's penny-stock status is Alex Ben Block, executive editor of special sections a Hollywood Reporter, the entertainment industry trade publication. He said last week, "Well, the short rap is that Ventura was wildly and grossly overvalued, and I guess it has found its level. The way the company was launched, the stock appeared to be wildly overpriced, compared to its assets and potential. I think the market has adjusted to the reality."

Ironically, 3-year-old Ventura in its fiscal third quarter ended March 31 actually reported a profit of $202,456, or 2 cents a share, on revenues of $3.41 million. However, for the nine months ended March 31, it posted a loss of $3.51 million, or 15 cents a share, on revenues of $12.42 million. It lost money also in its two previous fiscal years.

The game plan of Ventura is to produce commercials, television serials and made-for-television movies for less money than competitors do. In the first three years of operation, Bibicoff has maintained that losses are inevitable as a film library is built up and production costs eat into capital before royalties can come back.

Ventura has produced "Hollywood Detective," a made-for-cable series starring Gregory Peck's son Tony, and "rockumentaries" such as "Golden Age of Rock |n' Roll" and "The Spirit of Rock |n' Roll."

At one point it acquired a Utah studio from the singing Osmond family in 1989 and touted the facility as a place to accomplish low-cost production. However, it has since sold the property.

Too, a much-ballyhooed Ventura partnership with Artie Mogull, a music producer and former chairman of United Artist Records, is over, with Mogull taking ownership of the music production division separately from Ventura. Mogull had joined Ventura last June.

Even at $1 a share, it's a tough call whether to buy Ventura stock. Analysts don't cover the stock and management won't talk. A Ventura TV commercial production subsidiary, Harmony Productions, is out of compliance on certain debt covenants, according to Ventura's latest 10-q filing with the Securities and Exchange Commission, and the certifying accounting firm, formerly KPMG Peat Marwick, has been changed.

And anybody asking their stockbroker why Ventura is $1 stock, as Bibicoff recommends, is likely to get a blank stare.