ISDEX Hits Two-Year Low
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It had been more than two years - January 1999, to be exact - since internet.com's Internet Stock Index finished below 300. But the ISDEX broke that barrier on Thursday, finishing at 296 after tumbling as low as 286 earlier in the session.
And unless Internet stocks can reverse this month's painful descent, the 200 mark may be the next signpost on the ISDEX's journey south.
The ISDEX lost 18.2% in the week of trading ended Thursday, leaving it down 29.7% for February and 18.0% for the year. The Nasdaq, meanwhile, has dropped 19.0% this month and 9.1% in the year to date.
ISDEX stocks were nearly shut out in this abbreviated week of trading, with 49 tickers losing ground and only ad-services market leader DoubleClick posting an ever-so-slight gain of 0.5%. When losses are so complete and across-the-board, it's hard to know where to begin. I guess we should start at the bottom, where two companies from the recently hard-hit wireless sector reside.
, the company created by last year's merger between Phone.com and Software.com, plunged 37.5% this week to $38.19 and appears poised to challenge its recent low closing price of $27.56 on Jan. 8. This is somewhat surprising, given that OPWV on Jan. 22 reported an unexpected profit and blew away consensus estimates for Q2. Further, OPWV last month raised its revenue forecasts for 2001 - how often has that happened lately? - and this week both U.S. Bancorp Piper Jaffray and Credit Suisse First Boston reiterated "strong buy" recommendations for the stock. Nonetheless, since reaching $70.06 on Jan. 24, OPWV has plummeted 45.5%.
Wireless Facilitiessaw its shares plunge 35.1% following last week's release of Q4 numbers that failed to exceed Wall Street estimates, though like Openwave, WFII reported a quarterly profit. The market, however, seems to buy into JP Morgan's downgrading of WFII to long-term buy from buy.
TIBCO Softwaredropped 34.3% this week, with its $15.50 closing price on Wednesday being the lowest for the stock since November 1999. There was no catalyst behind TIBX's fall; in fact, the only relevant event in recent days was a Feb. 12 reiteration of a "strong buy" by Ryan, Beck & Co.
Portal Softwareshares were devastated on Thursday, falling 27.2% after the maker of billing software for telcos with customers who access the Internet using cell phones warned it would miss estimates for the first two quarters of 2001. PRSF pared back its initial estimate of a 3 cents per share profit for Q1 to break-even or a penny per share.
Caching appliance vendor CacheFlowcontinues its rapid descent, losing 27.0% this week. CFLO is the biggest loser on the ISDEX in the past three months, dropping 83.8% since Nov. 22, when the company reported disappointing revenues and growing red ink.
Finally, it's worth noting that CMGI- which fell 22.1% this week after NaviSite, the Web hosting company it owns, issued a serious revenue warning for Q2 - has cracked the $4 barrier, closing Thursday at $3.97. Not since March 31, 1998, has CMGI finished that low. Can things get even worse for the incredibly shrinking Internet holding company? They can and they will.