Summer's Aftermarket Stars Still Shine
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Internet stocks hit some heavy turbulence this summer, particularly in late July and early August. A look at internet.com's Internet Stock Index shows that from July 1 through Tuesday's trading, the ISDEX was down 11.1 percent.
Also suffering through the recent season of interest rate fears and earnings anxiety were Internet IPOs, a great number of which fizzled on the launch pad. Indeed, the average first-day performance of Internet IPOs in August was the lowest of any month this year.
No wonder, then, that some pundits and analysts have declared that the Internet IPO "bubble" has burst.
Thus it may come as a surprise that 60 percent of Internet stocks which hit the market in July and August are now trading above their respective first-day closing prices, according to the latest figures from internet.com's IPODEX.
|ICGE||Internet Capital Group||Aug. 5||298%|
|BRNC||Braun Consulting||Aug. 10||141%|
|IIJI||Internet Initiative Japan||Aug. 4||136%|
|RHAT||Red Hat||Aug. 11||116%|
|USIT||U.S. Interactive||Aug. 10||100%|
One thing that strikes me right away is the wide range of business models offered by the Net players listed above.
Runaway leader Internet Capital Group, while a CMGI-like holding company, really represents an investment in business-to-business e-commerce, for that is the exclusive focus of its portfolio.
After cooling off briefly early this month, ICGE is up nearly 50 percent since Sept. 10, trading Wednesday afternoon at $97.25.
HotJobs.com, on the other hand, is a content play. Though ranked second in the current IPODEX, the online employment site has fallen 26 percent since its $34.94 close on Sept. 7.
Braun Consulting is a services provider, helping companies design customer and supply-chain systems. Like ICGE, Braun caught a second wind this month, rising more than 40 percent in the past week alone. It was trading Wednesday at $17.25.
Other big gainers in the IPODEX include an Asian ISP (Internet Initiative Japan), an e-commerce software vendor (InterWorld), a network of Web-based real estate listings (Homestore.com), a maker of Linux operating system software (Red Hat), two telephony software and service providers (Net2Phone and Clarent) and another Internet consulting services company (U.S. Interactive).
While there definitely is an e-commerce flavor to this collection of hot Internet stocks, it is clear that investors continue to see strong opportunities in a broad cross-section of Net-related markets.
Tomorrow we'll look at the bottom-feeders in the IPODEX.
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