The American Idol Stock?

As part of a project for my MBA Policy class I will be following CKX, Inc. for the next few months. According to their website, CKX, Inc. (CKXE - Nasdaq) is "engaged in the ownership, development and commercial utilization of entertainment content." Among numerous other assets, they currently own the rights to the name, image and likeness of Elvis Presley, an 80% interest in the name, likeness, and trademarks of Muhammad Ali, and...

American Idol!!! Yes, the guilty pleasure we all crave is back in full force for its sixth season. We have already heard plenty of "It just wasn't right Dawg," "You're beautiful but I have to pass," and "That was bloody wretched." We've even seen Simon refer to one contestant as a "bush baby." And what does this harsh collection of comments equal? Ratings and money. American Idol is once again demolishing their competition.

What does this say for CKX? If American Idol's ratings continue to soar, will their stock price climb to the top of the entertainment industry? Should we all run out and buy as much CKXE stock as we can afford...heck, should we take out a second mortgage to buy more? Some people think so. Others do not. They cite the large number of recent sales by insiders as one reason not to.

We will track CKX and its stock (currently at $13.18) over the next few months and see what effect the popularity of American Idol has on investors. Will CKX turn into the next American Idol? Or will it fall to the bottom of the jungle floor like one of those creatures with those "massive eyes?" Stay tuned...