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RealTime IT News

Internet Market Close Report for 1999.02.11

When we said we were at the bottom it was nice to see the market agree today as ISDEX pops 13% to 319.33, with the broad market also rising. All of the 50 stocks in ISDEX, the world's leading Internet index, climb as buyers snap up Internet stocks that had taken a 22% beating the past week as a group.

Three new issues debut today and soar: VerticalNet (NASDAQ:VERT), which tripled from its $16 IPO price; Prodigy (NASDAQ:PRGY), which doubled from its $15 IPO price; and Healtheon (NASDAQ:HLTH), which triples from its $8 IPO price. Today's snapshot:

  11-Feb-99 point change % change
ISDEX 319.33 37.21 13.19%
NASDAQ 2,405.55 96.05 4.16%
DJIA 9,363.46 186.15 2.03%

  • CMGI (NASDAQ:CMGI) says it may not support the proposed Lycos (NASDAQ:LCOS) merger with USA Networks (NASDAQ:USAI) and Ticketmaster Online-Citysearch (NASDAQ:TMCS), reversing its position after watching LCOS shares drop dramatically after the deal was announced. CMGI owns 20% of LCOS and was its original investor.

    Internet Stock Report thinks that USA Networks should not be a 61% pro forma owner of the combined entities. It is not clear to us that USA Networks provides that much value to the overall merger. We believe Lycos and TicketMaster Online-Citysearch combined are more valuable properties than USA Networks. While we believe the $6.6 billion market value placed on LCOS in the deal was fair, the 30% position of the combined firms it would own afterwards seems like a low percentage for what it's contributing: one of the largest Internet audiences on the planet, almost on par with Yahoo in overall reach.

    USA Networks does enjoy a huge revenue advantage though, owed to its programming like Baywatch, which is watched by 1 billion people. However, in this new Internet era what matters more in our opinion is Internet reach and expertise over cable programming. We expect the deal to be recast in terms more favorable to Lycos and Ticketmaster-Citysearch.

  • Marketwatch (NASDAQ:MKTW) teams up with Compuserve (NYSE:AOL) to provide its financial news to Compuserve.

  • AOL (NYSE:AOL) will spend $8 million to prevent the Y2K bug from bugging its service, according to Reuters and AOL's SEC filing. The move underscores the uncertainty that the year 2000 may have with computer systems. We remain uncertain as to the full effect it could have on Internet companies, if any.

  • Sportsline (NASDAQ:SPLN) gains 15% to $40.125 per share after CBS says it's increasing its stake in the web sports content site. CBS now owns 18%, up from 12.5%. CBS needs a larger Web presence and has two outlets it's associated with, SportsLine and Marketwatch.


    Harmon's HotWatch '99 - the hottest analysis about Internet stocks delivered to your email box each month! Last year's 10 to watch from Steve Harmon was up 300%. Will 1999 be a repeat? More info click here