CDnow Plunge Highlights Bad Day for Net Shares
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Internet stocks were caught in a downward spiral at midday Wednesday as most of the sector's recent high fliers were getting clobbered due in large part to end of quarter selling.
At 12:15 p.m. Eastern, internet.com's Internet Stock Index had plunged 46.43, or 4.39 percent, to 1,010.24, the Nasdaq Composite had lost 136.58 to 4,697.31 and the Dow Jones industrial average had gained only 15.90 to 10,952.01.
The sector's worst performer was online music retailer CDnow Inc. (CDNW), off 1-3/16 to 3-7/8. Shares were plunging after Arthur Andersen, CDnow's accountant, questioned the company's ability to continue operations. In its annual report filed Tuesday, CDnow estimates it only has enough cash remaining to operate through Sept. 30.
It was also proving to be a negative session for many other Net leaders, including Checkpoint Software (CHKP), down 14-3/4 to 183-1/2, Ariba Inc. (ARBA), off 11-1/2 to 240-3/4, Doubleclick Inc. (DCLK) had fallen 8-1/4 to 98-3/8, eBay Inc. (EBAY) had slumped 18-3/8 to 205-7/16 and Inktomi Corp. (INKT) had tumbled 19-9/16 to 185-7/16.
Gainers included Excite@Home (ATHM), up 1-13/16 to 36-1/8. The cable Internet provider reached new distribution deals with several of its cable partners. The deals will lead to the opening of Excite@Home lines to other Internet providers wishing to offer high-speed service to their customers. Also, the company announced it was no longer planning to establish a tracking stock for its Internet properties.
MarketWatch.com (MKTW) had added 1-1/4 to 38-1/4. The online financial site received new funding commitments totaling $86 million from CBS Corp. and Data Broadcasting. The firms will invest cash and supply advertising and promotional consideration for the site.
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