Investors Take to IPOs, Yawn at Earnings
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Internet IPOs were the only good news in the sector today, as earnings reports were met by a lukewarm response from investors.
internet.com's Internet Stock Index slipped further down to 24.91, or 4.66 percent, to 509.47. The Nasdaq Composite fell 98.11 to 2732.18 and the Dow Jones industrial index lost 191.55 to close at 10,996.13, its fourth worst one-day point drop.
Highlighting the fearless IPOs of the less-than-spectacular day was Gadzoox ( ZOOX), which makes equipment connecting servers to data storage for high-speed access to stored information. Its shares more than tripled on its IPO, ending the day at 74-13/16. It was priced at $21 and opened at $48.
Internet marketing company Engage ( ENGA) set its IPO price of $15, opened at $28 and shot up to $47 at its highest sell of the day, then closed at $41.
Exceptions to the day's general decline were Healtheon and DLJDirect. Healtheon ( HLTH) shares shot up 4-1/16 to 63-1/8 on news of a deal with Merck-Medco to develop an online prescription service for physicians. DLJDirect ( DIR) was up 1-5/8 to 26-1/2 after releasing reports that the online brokerage had quadrupled profits and doubled revenues.
Online recruiter Webhire ( HIRE) shares rose 1-1/32 (15.5%) to 7-21/32 on news of a 40 percent stake taken by a Softbank property, whose parent company was one of the first to put significant cash into Internet favorites Yahoo! and E*Trade.
MP3.com showed confidence in its plans to ride the new wave of IPO blastoffs, uppings its offering share price for the second time to the $24 to $26 range.
Despite repeated reports that Microsoft is considering a spin off of its Internet properties, as well as reporting better-than-expected earnings, the tech beacon was held partially responsible for the Internet sector's decline after it released warnings of a weak sales forecast.
Sector leaders were also down, Yahoo (YHOO) ended down 7-3/8 at 142-1/8, AOL, (AOL) down 5-5/16 to 113-11/16, and Amazon (AMZN) slipping 11-9/16 further to 120-1/8. Amazon and AOL are up tomorrow on the earnings announcement slate.