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RealTime IT News

Nets, Techs Fall Despite CMGI Earnings, Tame Inflation Data

Internet and technology shares fell Wednesday despite better-than-expected numbers from both CMGI and the Consumer Price Index.

The ISDEX fell 10 to 727, while the Nasdaq fell 53 to 3797 after running into resistance around the 3900 level. The Dow rose 66 and the S&P 500 climbed 1 point. Volume rose slightly to 929 million shares on the NYSE, where advancers led 16 to 12. Nasdaq volume was 1.4 billion shares; decliners led 22 to 17. May's Consumer Price Index came in 0.1% better than expected, showing a 0.1% rise, while the core rate rose 0.2%, in line with estimates.

Shares of StarMedia , up 2 5/26 to 19 9/16, RealNetworks , up 2 to 45 13/16, and Concentric Network , up 2 to 49, were the standouts in the ISDEX. Sportsline , down 1 3/16 to 15 1/4, 24/7 Media , down 1 1/2 to 15 1/2, and CNET, down 2 3/8 to 29, led on the downside.

Shares of CMGI fell 3/8 to 56 1/4 after trading as high as 62 1/2, despite better-than-expected third quarter earnings and revenue. Revenues rose nearly 50% sequentially. The company realized gains from the sale of shares in Yahoo! and Amazon.com , and recognized $20 million from recent IPO Vicinity . Yahoo was unchanged on the day at 139 1/2, while Amazon fell 2 1/4 to 46 3/4. Internet Capital Group initially followed CMGI higher, but ended down 2 17/32 to 31 15/32. For more on CMGI's earnings, click here.

Shares of FatBrain.com fell 1 1/2 to 8 3/16 after the company missed its earnings number. Initial reports did not include numbers from MightyWords and were misreported as exceeding estimates. There was also concern over the company's cash burn rate. However, Needham & Co. upgraded FatBrain from Hold to Buy, with a price target of $20, on the strength of the company's core business and confidence that it will be able to secure additional financing.

Shares of Critical Path , up 1 5/16 to 46 3/4, and Aether Systems , up 13/16 to 181 13/16, rose on news that the two will develop messaging and collaboration solutions to businesses and consumers via wireless devices.

eBay fell 4 1/2 to 63 1/2 after announcing plans to buy fixed-price person-to-person trading marketplace Half.com for $313 million to $374 million in stock. Infonautics , which will receive eBay stock in exchange for its stake in Half.com, rose 25/32 to 4 3/4. Robertson Stephens upgraded eBay to Strong Buy on the news. PaineWebber reiterated a Buy rating on eBay and $142 price target, noting that eBay will "tap into Half.com's impressive traction (250,000 registered users after only five months of operation)." The deal is expected to be dilutive by about 3 cents in the second half of 2000, but slightly accretive in 2001. For more on the deal, click here.

Shares of Digital River fell 2 3/4 to 10 3/8 after the company's presentation at the Bear Stearns technology conference left analysts wondering if the company might not make its numbers this quarter.

Red Hat rose 13/16 to 22 5/8 after announcing the acquisition of Linux communications software developer WireSpeed Communications for 1.5 million shares. For more on the story, click here. Red Hat is expected to report a loss of 4 cents before the bell on Thursday, in line with the year-ago quarter.

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