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Sizzle & Fizzle: Onsale Leads Stock Gains, Up 47% In Week

Like riding the Matterhorn at Disneyland, investing in Internet companies comes with its own ups and downs, many times with the same firm. Web-based auction service Onsale (NASDAQ:ONSL) provides perfect anecdotal evidence of the on-again adrenaline ride Wall Street plays. ONSL tops our list of gainers since January 13, up 47%.

Long-time let's wait and see if it ever gets appreciation Internet service provider PSINet (NASDAQ:PSIX) finally posts some upside, but we wonder if it meets the height requirement in the all new grab-and-go Internet space? Especially when its friends have already moved on to the next attraction--telcos or larger communications wannabes.

Some of the more significant riders on this loop de loop include Earthlink Network (NASDAQ:ELNK), which begins to find equal footing with its main rival Mindspring (NASDAQ:MSPG).

The new pecking order: AOL (NYSE:AOL), Yahoo! (NASDAQ:YHOO), Excite (NASDAQ:XCIT), and Lycos (NASDAQ:LCOS) and then a tie between ELNK and MSPG. Sure it's access and access to content. A blurring line. Maybe even deals to close the gap. Not full-on acquisitions, co-marketing à la the Yahoo-MCI handshake.

We told you about Sportsline [ISR Nov. 14, 1997] when SPLN was under $10 a share. Now it's over $23 after the investment banks put out their own ratings this month that echoed that two-month-old analysis.

Some ISPs have shined, but still on the "Internet leper" stock list is Concentric (NASDAQ:CNCX), for no reason we can see. It may prove to be a sleeper about to wake up. If Mindspring and Earthlink go up, why not a business-centric ISP?

CNCX just placed $150 million units last month, with each unit consisting of $1,000 in principal amount of its 12-3/4% senior notes due 2007 and a warrant to purchase 6.34072 shares of CNCX. Can acquisitions be far behind? Has this been discounted into CNCX yet?

Here's a look at the stats, sorted by most percentage gains, with 26 of the 35 on the plus side:

Hot & Not Internet Stocks

ISDEX ® Ticker 21-Jan-98 % change Point change % change
Internet Stock Index symbol close from from from
     13-Jan-98 13-Jan-98 31-Dec-97
           
ISDEX Geometric Average   110.15 10.2% 10.23 10.3%
ISDEX Price Wtd. Composite   879.00 8.7% 70.38 7.7%
NASDAQ   1,587.92 3.0% 46.29 1.1%
DJIA   7,794.40 0.8%62.27 -1.4%
           
Onsale ONSL $ 25.88 47% $8.25 44%
PSINet PSIX $ 8.44 42% $2.50 65%
Versant Object Technologies VSNT $ 7.06 38% $1.94 -49%
USWeb USWB $ 13.63 32% $3.31 45%
Earthlink Network ELNK $ 36.88 29% $8.38 43%
Sportsline USA SPLN $ 23.13 29% $5.25 115%
CNET CNWK $ 32.00 23% $6.00 8%
Mindspring MSPG $ 35.88 21% $6.31 7%
CMG Info CMGI $ 36.00 20% $6.06 19%
Infoseek SEEK $ 12.38 16% $1.69 15%
Forefront FFGI $ 9.25 16% $1.25 18%
Excite XCIT $ 38.31 15% $5.13 28%
Open Market OMKT $ 12.13 14% $1.50 26%
Spyglass SPYG $ 6.25 14% $0.75 27%
VocalTec VOCLF $ 22.06 12% $2.31 8%
Amazon.Com AMZN $ 60.88 9% $5.13 1%
Lycos LCOS $ 39.56 9% $3.19 -4%
Mecklermedia MECK $ 26.13 8% $2.00 5%
Concentric CNCX $ 10.25 8% $0.75 15%
America Online AOL $ 95.25 7% $6.00 5%
E*TRADE EGRP $ 23.94 5% $1.09 4%
Open Text OTEXF $ 12.00 4% $0.50 -10%
Trusted Information Systems TISX $ 10.69 4% $0.44 7%
Security First Net Bank SFNB $ 7.13 4% $0.25 -2%
Security Dynamics SDTI $ 38.38 2% $0.75 7%
CKS Group CKSG $ 14.63 2% $0.25 4%
RealNetworks RNWK $ 16.13 -2% -$0.25 16%
Raptor RAPT $ 11.88 -2% -$0.25 -10%
Yahoo! YHOO $ 63.88 -3% -$1.91 -8%
@Home Network ATHM $ 23.75 -5% -$1.19 -5%
N2K NTKI $ 22.50 -5% -$1.13 54%
CyberCash CYCH $ 10.81 -6% -$0.69 -15%
Network Solutions NSOL $ 17.00 -6% -$1.13 30%
Netscape NSCP $ 17.88 -6% -$1.19 -27%
CheckPoint Software CHKPF $ 37.13 -7% -$2.88 -9%
TOTAL   879.00 8.7% 70.38 7.7%
SIMPLE AVERAGE   25.11 8.7% 2.01 7.7%

January 21: USWeb (NASDAQ:USWB) reports $10.6 million sales on $19 million loss for fourth quarter. Full-year results reach $19.3 million sales and $53.3 million loss. USWeb says this includes an $11.1 million unusual charge for 4Q and $29.6 million for full year. We still think it's early in the turnkey Web solution game and that USWeb may have a lot longer to go to reach critical awareness.

Januar 20: AOL (NYSE:AOL) reports its 11 millionth subscriber citing strong sales of sub-$1,000 PCs, which accounted for 40% of all PC sales this holiday season, as the driver.

January 16: Sportsline (NASDAQ:SPLN) agrees to acquire GolfWeb for 860,000 shares. The news sends SPLN up to $20.625 per share Friday. It's timely that we discussed Sportsline in the ISR Jan. 14 morning report. Sports are a no-brainer. Sportsline combined with the CBS TV reach, stay tuned.

January 15: Excite (NASDAQ:XCIT) tries to set the pace again for "Web networks" with the $89 million buy for target marketing and ad management software firm Matchlogic. With $4 million revenue the multiple is north of 22x on a trailing basis. Deal value could exceed $107 million if agreed upon shares--3.2 million--remains intact.

January 14: Yahoo! (NASDAQ:YHOO) posts year-end revenue of $67.4 million, up 242% vs. 1996. Fourth-quarter revenue hits $25 million, up 181% vs. 4Q96. Pro forma net income is $2.6 million or $0.05 per share, excluding $3.9 million charges related to the acquisition of Four11, the directory and e-mail company. With that charge, net loss is $1.3 million $0.03 per share.

Closely held AudioNet raises $22 million from investors including Motorola, Intel, and Yahoo!, among others. AudioNet produces, appropriately, audio content for the Internet.


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