RealTime IT News

ISDEX Down, But Far From Out

The red ink that continues to flow from Q2 earnings reports pushed Internet stocks even further under water in the week of trading ended Wednesday.

This steep decline is reflected in internet.com's Internet Stock Index, which fell 11.3% (from 771 to 684) and saw only one company, SportsLine.com , gain for the week.

At the other end of the list, things are a bit more crowded, with nine ISDEX stocks posting losses of at least 20%.

For the year, the ISDEX is down 20.5% from its Dec. 31 close of 860. Individually, only nine ISDEX stocks are up in the YTD, while 17 have lost 60% or more.

Can the ISDEX move back into the black by the end of 2000? Sure it can. In fact, before the slump that has gripped 'Net tickers since mid-July, the ISDEX had clawed its way to a July 17 close of 837, less than 3% below break-even.

And with a disproportionate number of profitable market leaders among its members, the ISDEX as a whole should fare well once the dust from Q2 settles and more investors are comfortable separating the winners from the losers.

Not that there aren't seriously endangered stocks in the group. Unless something changes drastically, it looks as though investors have given up on Intraware , eToys and Open Market , which for the year are down 90%, 84% and 85%, respectively. Other companies, such as Excite@Home and GoTo.com , down 68% and 73%, respectively, also may have a hard time rekindling investor support for their shares.

But the strong outnumber the weak on the ISDEX. Companies such as online auction giant eBay , digital certificate and Internet services provider VeriSign , Internet streaming multimedia software leader RealNetworks , America Online and Yahoo! are among the many profitable 'Net players down anywhere from 20% to 40% this year. When the shakeout phase ends, and that could happen as soon as September or as late as sometime next year, these are the kinds of companies that will attract strong support from the market.

Here are the ISDEX's 10 biggest losers for the week:

S1 Corp.         -40.2%
InfoSpace        -34.2%
Intraware        -32.3%
Net2Phone        -24.6%
EarthLink        -24.3%
Portal Software  -22.4%
eToys            -22.1%
Juniper Networks -20.8%
VeriSign         -20.0%
PSINet           -19.5%