RealTime IT News

Bears Are Out: Interest Rate Fear Gets Stronger

Manufacturing numbers spooked the market as investors think the Fed may step up and tighten the money supply. To get a sense of what the fear provoked I took a slice of the last month of ISDEX. Result: it's down 11.8% or just about as much as the NASDAQ has ran this year.

By now the IPO mania looks a little tamer where the word "mania" doesn't describe it. Myopia perhaps. Said it before but will keep saying it that the summer looks choppy to me and I expect it to be that way until late August/September when year-end numbers start driving the group.

Let's see the bears, bulls:

ISDEX ®   01-Jun-99 % change 04-May-99
The Internet Stock Index   close from close
www.isdex.com     04-May-99  
         
ISDEX   483.82 -11.8% 548.74
NASDAQ   2,412.03 -2.9% 2,485.12
DJIA   10,596.26 -2.7% 10,886.11
         
Axent AXNT $ 12.31 36% $ 9.06
Broadcom BRCM $ 93.06 18% $ 79.00
CheckPoint Software CHKPF $ 44.19 17% $ 37.69
Network Associates NETA $ 14.56 16% $ 12.56
USWeb USWB $ 26.13 15% $ 22.63
Verisign VRSN $ 56.00 11% $ 50.56
Exodus EXDS $ 76.63 7% $ 71.63
Prodigy PRGY $ 24.06 2% $ 23.50
CDnow CDNW $ 18.75 2% $ 18.44
VocalTec VOCLF $ 10.69 -1% $ 10.75
Lycos LCOS $ 92.75 -1% $ 94.00
Cisco CSCO $ 107.06 -1% $ 108.63
Excite XCIT $ 133.00 -4% $ 138.19
GeoCities GCTY $ 100.13 -5% $ 105.50
Broadvision BVSN $ 51.88 -6% $ 55.00
PSINet PSIX $ 43.50 -7% $ 46.56
eBay EBAY $ 166.50 -8% $ 181.25
Open Market OMKT $ 11.75 -9% $ 12.88
Security Dynamics SDTI $ 18.69 -10% $ 20.72
Inktomi INKT $ 96.75 -10% $ 108.00
Broadcast.com BCST $ 103.50 -11% $ 116.00
America Online AOL $ 113.13 -11% $ 127.13
Infoseek SEEK $ 39.56 -12% $ 44.94
Yahoo! YHOO $ 138.19 -13% $ 159.25
@Home Network ATHM $ 117.56 -13% $ 135.69
Sportsline USA SPLN $ 32.88 -13% $ 38.00
CNET CNET $ 50.13 -14% $ 58.00
CyberCash CYCH $ 13.25 -15% $ 15.50
Network Solutions NSOL $ 59.25 -15% $ 69.50
Security First Technologies SONE $ 40.38 -15% $ 47.50
Egghead.com EGGS $ 11.00 -19% $ 13.50
CMG Info CMGI $ 96.25 -20% $ 119.75
Mindspring MSPG $ 70.50 -20% $ 88.00
Concentric CNCX $ 32.31 -20% $ 40.63
Earthlink Network ELNK $ 50.72 -21% $ 64.00
Verio VRIO $ 50.00 -22% $ 64.00
Beyond.com BYND $ 19.50 -22% $ 25.06
Infospace.com INSP $ 43.88 -23% $ 57.00
Cyberian Outpost COOL $ 10.75 -23% $ 14.00
E*TRADE EGRP $ 39.31 -24% $ 51.50
Doubleclick DCLK $ 91.94 -24% $ 120.94
Go2Net GNET $ 98.44 -25% $ 130.75
Amazon.Com AMZN $ 105.81 -26% $ 143.00
Onsale ONSL $ 18.25 -30% $ 26.00
Xoom.com XMCM $ 47.00 -30% $ 67.31
Preview Travel PTVL $ 16.63 -31% $ 24.25
iVillage IVIL $ 45.25 -32% $ 66.88
RealNetworks RNWK $ 65.38 -35% $ 100.78
24/7 Media TFSM $ 26.50 -37% $ 42.00
ISS Group ISSX $ 26.63 -47% $ 50.50
News behind the moves:

  • 99.06.01 - E*TRADE (NASDAQ:EGRP) makes s $1.8 billion stock offer for Web-based bank Telebanc. Investors react unfavorably, driving down EGRP 11.66% to $39 5/16 per share. Also hurting EGRP is Merrill Lynch's new Internet effort. I see Schwab in front with Merrill perhaps catching up in 24 months. It should have just acquired E*TRADE. Because my thinking is that Merrill may waste time trying to figure out the Net.

  • 99.05.27 - InfoSpace.com (NASDAQ:INSP) jumps 16% to $44 7/8 per share on the news that 700 Web sites will use its ActiveShopper shopping engine.

  • 99.05.26 - StarMedia prices 7 million shares at $15, opens at $25 3/16, goes as high as $30 and closes at $26 1/16, up 74%. This IPO looks like a more "traditional" Internet offer, less speculative runup the first day but still a healthy run, especially vs. the weaker performing IPOs today: Edgar-Online, Ziplink, Juno. Only DLJDirect joins StarMedia above the noise of offerings.

  • 99.05.26 - RealNetworks (NASDAQ:RNWK) jumps 21% to $70 3/16 per share as an Internet mutual fund reportedly buys into the software streaming firm. I would like to see RealNetworks consider some strategies to becoming a service firm (as in a multimedia network), perhaps divesting all or part of its software side or aligning its software side strategically with a larger concern.

    Why? Microsoft keeps pounding the software angle but it's much harder to win against a service. That's why AOL and Yahoo have beat Microsoft so far, they are "services" and not "software."

  • 99.05.14 - CheckPoint (NASDAQ:CHKP) climbs 10.5% to $45 5/16 per share as the Internet security software firm announces two new products in as many days. One addresses the virtual private network space while the other the public key infrastructure space.

    I've been waiting for a loooong time for CHKP to break out and glad to see my faith. This is one I've waited for for more than two years to find some running room.

    Security software in general has been a dog sector but of all of them I see CheckPoint and Security Dynamics (NASDAQ:SDTI) as having the most potential. Network Associates has some also if it can get past shareholder lawsuits.

  • 99.05.11 - CMGI (NASDAQ:CMGI) stock is held by FMR, Fidelity's parent company, which announces it holds a 10.3% stake in CMGI. Interesting if you recall January 6 in my outlook report of hot stocks to watch for '99 that I mentioned any portfolio manager that didn't have CMGI in its portfolio should retire. Fidelity apparently listened.

    The question now is: Is CMGI fully valued? I can see the way clear to CMGI being valued at double its current level. To me this is not a earnings story it's a holding company story. With CMGI you get a basket of Internet firms in one stock.

  • 99.05.11 - NBC (NYSE:GE) agrees to acquire Xoom.com (NASDAQ:XMCM), and combine it with CNET's Snap (NASDAQ:CNET) into a new firm called NBCi, a new Internet company. It will include NBC.com, NBC's station affiliate Web effort Interactive Neighborhood, multimedia site Videoseeker.com, and a 10% of soon-to-be beefed up CNBC.com. Pro forma, assuming debt conversion by NBC into equity, who owns what: NBC 53%, Xoom.com 34%, CNET and Snap.com 13%. More and more I think these TV-Web deals could accelerate.


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