RealTime IT News

ISDEX After The Seismic Moves

The Los Angeles area is famous for many things: tinseltown, silicone (not silicon per se), amusement parks, and shaking up the terra firma on a regular basis with earthquakes.

Therefore, it's ironic that every year as Spring Internet World gets sprung that the Internet stock sector gets slammed. I saw this phenomenon last year and again this week as ISDEX peaked early to new highs and then settled April 15 in a two-day tremblor after profit taking.

Combine the geography and lexography and the only word for it is an "iQuake," a seismic jolt through the Internet stock landscape. The 2.3% ISDEX drop doesn't reflect the drop and slight rebound. April 14 ISDEX lost 55 points, more than 3x April 15's ripple.

Even so, about half the stocks in ISDEX ended the week since April 6 up. But today let's see who's down.

The beauty of us "seismologists" surveying the fallen amid the rubble is simple: which stocks got taken along for the wave ride down for no other reason than being close to the epicenter.

If the correction was due to underlying fundamental reasons like revenue, earnings shortfalls, or greater-than-expected losses, lack of traffic growth, the fact that the bearded ladies investment club logged off eBay then I would be worried. But I don't think that's the trigger here.

The drop from all-time highs was simply the result of investors withering nerves as the skyscrapers swayed in the cloud-driven heights while the Dow and NASDAQ looked like one-story flats.

Seeing the gains sent investors to the "take profit now mode." I think investors should always know what they're comfortable with on the high side and low side -- their tolerance for reward and risk -- and consider taking their cost basis off the table as their positions move around.

So let's take a walk downtown after the iQuake and see which stocks look like they could rebound now that I think the dust may have settled a bit:

ISDEX ®   15-Apr-99 % change Point change
The Internet Stock Index   close from from
www.isdex.com     06-Apr-99 06-Apr-99
         
ISDEX   602.99 -2.3% -14.50
NASDAQ   2,521.77 -1.6% -41.40
DJIA   10,462.72 5.0% 499.23
         
Verio VRIO $65.00 55% $23.00
CyberCash CYCH $20.44 40% $5.81
Inktomi INKT $120.88 35% $31.25
E*TRADE EGRP $101.44 33% $25.44
Security First Technologies SONE $115.00 29% $26.00
PSINet PSIX $54.69 21% $9.56
CMG Info CMGI $276.25 20% $46.63
eBay EBAY $178.88 18% $26.88
Go2Net GNET $157.88 17% $23.44
Axent AXNT $10.13 16% $1.38
CNET CNET $127.13 15% $16.50
Infospace.com INSP $119.19 12% $12.94
Xoom.com XMCM $82.00 9% $6.44
Open Market OMKT $15.00 7% $1.00
CheckPoint Software CHKPF $32.06 6% $1.94
Doubleclick DCLK $127.88 6% $6.88
Onsale ONSL $35.06 5% $1.69
iVillage IVIL $104.88 3% $3.25
24/7 Media TFSM $49.81 3% $1.50
Sportsline USA SPLN $52.75 3% $1.38
VocalTec VOCLF $10.88 2% $0.19
Beyond.com BYND $32.00 2% $0.50
Earthlink Network ELNK $73.00 1% $0.44
CDnow CDNW $15.94 -1% -$0.13
Excite XCIT $146.94 -2% -$3.00
Security Dynamics SDTI $16.50 -2% -$0.38
Mindspring MSPG $102.75 -2% -$2.63
Preview Travel PTVL $20.38 -3% -$0.56
Verisign VRSN $156.56 -3% -$4.56
Cisco CSCO $110.31 -4% -$4.94
@Home Network ATHM $152.50 -6% -$9.63
Broadcom BRCM $65.50 -8% -$5.38
RealNetworks RNWK $180.00 -8% -$15.44
GeoCities GCTY $128.00 -8% -$11.50
Amazon.Com AMZN $167.25 -9% -$15.63
Concentric CNCX $88.00 -9% -$9.00
Egghead.com EGGS $15.63 -9% -$1.63
Yahoo! YHOO $194.63 -9% -$20.25
Prodigy PRGY $35.50 -10% -$3.75
Broadcast.com BCST $140.50 -10% -$15.88
Lycos LCOS $94.56 -13% -$14.25
Exodus EXDS $69.25 -13% -$10.75
Cyberian Outpost COOL $16.50 -13% -$2.56
America Online AOL $143.88 -14% -$23.63
Broadvision BVSN $51.38 -17% -$10.38
Network Solutions NSOL $93.50 -19% -$22.00
Infoseek SEEK $64.63 -23% -$19.44
ISS Group ISSX $52.00 -25% -$17.75
Network Associates NETA $15.25 -30% -$6.69
USWeb USWB $27.06 -33% -$13.06

For good reason Network Solutions (NASDAQ:NETA) got hammered on accounting mixups and SEC probing around. But what to me should be a ballpeen experience turned into a sledgehammer-fest as NETA tanked to new lows.

Despite the accounting guffaws and management mishaps the products sell well and have a huge installed base, which to me is reflected in its sales and security software presence. NETA is barely off its 52-week low but well off its 52 week $67.6875 high.

Anytime I see Internet bellwether AOL (NYSE:AOL) lose a few points on no news it signals that Wall Street probably popped a few "stupid pills." For well over two years I've called AOL the "next Microsoft." But the analogy isn't true 100% since AOL defines the Internet experience as few others, a better role in a service is king era.

I know its market cap looks frothy on some levels but I continue to be a fan of Web host firm Exodus (NASDAQ:EXDS), down 13% since April 6.

EXDS stock just split 2-for-1 April 12. What attracts me to it is the fact Yahoo!, Lycos, Hotmail, Inktomi and GeoCities use Exodus to host their content. EXDS grows with them in the background in a "Switzerland" of the Internet position.

So when iQuakes come along as they did the past two trading days keep in mind that not everything that sways deserves to fall.


Accolades:

"Fresh and provocative" -CBS Marketwatch, who named Steve Harmon one of the top Internet stock analysts and only