Australian Internets Sour on Nasdaq Slide
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Investors battered Internet counters Thursday after the US' Nasdaq Composite sank another 123.95 points to 4582.68 while the Dow Jones industrial average leapt 3.26%. The benchmark Australian All Ordinaries Index was up 0.9% at midday, lead by a surge in resource stocks.
Thin volumes and a 12.3% drop on the Nasdaq Wednesday saw dual listed web portal Looksmart (LOK) drop 6.55% to Aus $4.75 in the morning session. Looksmart's fall comes despite announcing a partnership with US ISP FlashNet Communications Inc. Looksmart will provide its search and directory services to FlashNet's 250,000 subscribers.
Technology investor Cardia Technologies Ltd. (CNN) bucked the down turn in Net related stocks, jumping 7% to 46 cents Wednesday morning after Ninemsn announced a partnership with Internet insurer SafeTrade Ltd.. Cardia holds the right to subscribe to 20% of SafeTrade stock when it lists later this half. Ecorp (ECP), which owns ninemsn in conjunction with international software behemoth Microsoft, wasn't spared from the downward turn in Internet stocks, losing 5% in the Thursday morning session to $5.51. Suspended mining and technology company Min-Tech 8 Ltd. (MTC) has also secured the right to 20% of SafeTrade.
Financial content provider, Channel-e (CEL) dropped 2.6% following the company's announcement of a first half after tax loss of $1.318 million with no sales revenue. Channel-e has some impressive joint-ventures (AFX News Ltd. for one) on its books and some high profile players in its management team but investors have to ask: How far can it go without revenues?
Australian e-tailers were among the worst hit by Thursday morning's sell off. Wine Planet (WIN) fell 11.9% to 40 cents in the morning session, Jumbomall.com (JUM) lost 4.2% and Adultshop.com fell 3.9%. The big fall in Wine Planet stock comes as a surprise as it was one of the best Internet performers in Wednesday's surly market after it announced its first half results.