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Top 10 Decliners: Tallying The Bloodbath, Bears & Bulls

Fans of the running of the bulls often forget about the kind of damage those horns can do if they happen to pierce. The trick for Wall Street has been sprinting ahead of the ivory tips in the foolish belief that the sky is rising and the legs aren't tiring. Investors beginning Friday and yesterday discovered that the horns were for real and the knees were not so strong, as ISDEX lost 21% of its value, 15% of that on August 31 alone.

The broader market bellwether Dow dropped more than 500 points in its second-largest one-day drop in points ever. The question being raised again and again is--how far is enough?

Our analysis indicates that all the indices have wiped out 1998's gains and then some. ISDEX is more than 12% below where it began the year.

ISDEX price weighted, which shows prices of new stocks added from IPO price, was up 25%, however, with the IPOs in the mix. Overall, the four different indices together were down 2.2% since December 31, 1997.

All indices year to date 31-Aug-98 31-Dec-97 % change
ISDEX geo. average 87.01 99.87 -12.88%
ISDEX price weighted*** 1,144.94 913.90 25.28%
NASDAQ 1,499.25 1,570.35 -4.53%
DJIA 7,539.07 7,908.25 -4.67%
blended market results 10,270.27 10,492.37 -2.12%
NOTE: *** = ISDEX price weighted includes new 1998 IPOs percent change from IPO price

The top 10 decliners for ISDEX in the bloodletting August 31 are as follows. In it we add the bullish and bearish comment about the stock, based on the notion of how easy and quickly investors forget that in July ISDEX was near an all-time high. There's a bull lurking in every bear and bear hiding in every bull.

Top 10 ISDEX Decliners August 31

ISDEX ticker 31-Aug-98 28-Aug-98 % change bearish take bullish take
Excite XCIT $ 21.75 $ 30.56 -28.8% brand vs. EPS Leading Web service
PSINet PSIX $ 10.50 $ 14.56 -27.9% Asia exposure International growth
Lycos LCOS $ 21.69 $ 29.88 -27.4% Join the search fall Community king
Secure Computing SCUR $ 6.38 $ 8.41 -24.2% Security sector weakness Consolidation needed
Earthlink Network ELNK $ 26.50 $ 34.88 -24.0% Soros investor Soros investor
CMG Info CMGI $ 38.13 $ 50.00 -23.8% Lycos and GeoCities And 2 dozen promising startups
Netscape NSCP $ 18.00 $ 23.50 -23.4% Portal-un-mania Strong sales latest q
@Home Network ATHM $ 28.50 $ 36.75 -22.4% Cable pipe dream still Nirvana speeds
Onsale ONSL $ 14.38 $ 18.25 -21.2% Everywhere auctions Great prices

Excite's (NASDAQ:XCIT) aggressive buying and, more recently, write-down accounting got it into the hot seat with investors. Russia just gave them a reason to walk on the stock. Also, we think stocks that ran on brand and emotion can also fall on those two elements just as easy.

PSINet (NASDAQ:PSIX) has been the target of takeover rumors for well over six months now and no suitors in sight. It's been building a global network for data and IP communications which we believe bodes well for the future, in spite of skittishness about international exposure.

Lycos (NASDAQ:LCOS) may emerge as the king of community Web-services with all the potential revenue and possible earnings flow that it implies. People are commerce and now Lycos has people with its community sites. The challenge is converting them to customers or selling them to marketers in a way that doesn't make them pack up and go.

Earthlink (NASDAQ:ELNK) coincidentally is owned in part by one of super-investor George Soros' funds. Soros was famous for making $1 billion by shorting the pound in the 1980s. Now he may be more famous for investing $2 billion in Russia before it collapsed.

Perhaps the most speculative of the top 10 decliners is @Home (NASDAQ:ATHM), full of the promise of high-speed Internet services via cable but not available on the scale of an AOL coast-to-coast or globally. Highspeed Internet access rules, but sign-ups need to be stronger in our opinion--@Home serves about 150,000 cable modem subscribers in North America out of 8 million homes passed.

We expect the bulls and bears debate to continue as the market tries to find its red cape. For now, all it sees is just plain old red from the bloodletting of the past two trading sessions.

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