Internet Stocks Rise & Drop After Profit Taking
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Internet stocks climb higher in early trading before profit taking shaves some of the gains in afternoon moves. The Dow and NASDAQ also fall slightly as the market inhales a dose of inflation fear again. The current ISDEX value is 505.22 with a change of-17.95(-3.43%).
I believe that's the motivation behind the move more than anything else. And the fact that CMGI probably would like to acquire Lycos but Lycos is too expensive. Alta Vista has been an anomaly at Compaq ever since Compaq acquired Digital (Alta Vista's parent).
What could Alta Vista command in terms of valuation? I would peg it around $1.75 billion in a public market for Alta Vista and other Compaq Web assets Zip2 and Shopping.com, maybe more if rival bidders emerge and depending on terms.
As I said before, CMGI needs traffic and assets. See tomorrow's Morning Report for more of my in-depth analysis.
Sprint (NYSE:FON) owns 20% of ELNK so I think it will have to approve of the deal or outbid Gateway should the PC maker bid. I can see ELNK in the $2.5 billion range in a competitive bidding situation, maybe more. That's implies a value of about $2,500 per subscriber.