Whatever multimedia is, it sure can give investors a roller-coaster ride.

The biggest player in this new industry — where Hollywood meets Silicon Valley — is unquestionably 3D0 Inc., the creator of a new generation of interactive multimedia players.

The company boasts a pedigree no other can: Its investors include the owners of MCA/Universal, Matsushita Electric Industrial Co. Ltd., Time Warner Inc. and telecommunications giant AT&T. And unlike videogame industry leaders Nintendo or Sega, 3D0 promises to deliver to consumers a stunning leap in technology for Christmas.

A partial down payment was made on that promise at the Consumer Electronics Show in Chicago, starting June 3, with a player from Matsushita’s Panasonic label and an array of software titles.

Almost immediately, shares of the San Mateo-based company headed skyward. On Thursday, June 3, the price jumped 5 1/2 points to set a new high of $ 31.50.

And it just kept going up. The next day, after large investors walked the convention floor and compared 3D0’s titles, including one from “Jurassic Park,” against competitors, shares climbed another 7 points before settling back down to $ 30.75.

The volume of shares changing hands more than doubled. Between June 1 and June 7, 3D0’s market value climbed an astounding 30.7%, hitting $ 656.6 million.

By week’s end, June 11, however, 3D0 had slid back to 30 3/4, despite a trading range that sprang from 20 3/4 to 31 1/4.

There are two reasons for the dizzying ride. One, there are only 8.6 million shares, out of a total 19.6 million outstanding, in the public’s hands. “When you have stocks with a little float,” says media analyst Steve Eskenazi at Alex Brown & Sons, “they can run it up and down when one buyer wants to get in.”

It’s also common for technology-related stocks to take off, fueled by announcements made at a major trade show.

Trip Hawkins, 3D0 founder and chairman, didn’t disappoint, delivering a rousing keynote speech. Panasonic is bracing for a marketing blitz that will be its biggest ever. Sanyo Electric Co. Ltd. will also produce its own version of the multiplayer.

More remarkable is that 3D0 has been public for just one month and may not show earnings until 1997. As a result, not all institutional investors are holding on for the ride. One bailed out in the mid-20s, pocketing a tidy profit from the offering price of $ 15.

“I don’t find it terribly compelling at this price,” said another money manager. “Its valuation is very rich for a company without a product yet. We could easily get back in since we’ve been impressed with the progress they’ve made since the offering.”

Even Alex Brown’s Eskenazi has a “neutral” recommendation on the stock. He pegs a fair valuation at between $ 15 and $ 25 a share.

But investors may want to dive in when the price is right, say some long-term bulls. AT&T just signed a hardware license to produce a 3D0 player that connects to a network via phone lines sometime in 1994.

The capper, said one analyst, was Hawkins’ admission that a test using the 3D 0 box on a cable system is planned for early 1994. The likely spot is Viacom’s Castro Valley Project, north of San Francisco.

“That’s very important,” said Jason Weiner, an analyst with Fidelity Investments. “Look at his partners. He has a cable and a telephone company. The delivery of the software could be either way, and frankly, everyone has a telephone.”

Wall Street may not have to wait until 1994 to find out if they made a safe bet.

This Christmas’s sales for the player and titles will be milestones to watch. That could be the real present under an investor’s tree.

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