Bears Are Out: Interest Rate Fear Gets Stronger

Manufacturing numbers spooked the market as investors think the Fed may step up and tighten the money supply. To get a sense of what the fear provoked I took a slice of the last month of ISDEX. Result: it’s down 11.8% or just about as much as the NASDAQ has ran this year.

By now the IPO mania looks a little tamer where the word “mania” doesn’t describe it. Myopia perhaps.
Said it before but will keep saying it that the summer looks choppy to me and I expect it to be that way until late August/September when year-end numbers start driving the group.

Let’s see the bears, bulls:

























































































































































































































































































































































































































ISDEX ®

 

01-Jun-99

% change

04-May-99

The Internet Stock Index

 

close

from

close

www.isdex.com

 

 

04-May-99

 

 

 

 

 

 

ISDEX

 

483.82

-11.8%

548.74

NASDAQ

 

2,412.03

-2.9%

2,485.12

DJIA

 

10,596.26

-2.7%

10,886.11

 

 

 

 

 

Axent

AXNT

$ 12.31

36%

$ 9.06

Broadcom

BRCM

$ 93.06

18%

$ 79.00

CheckPoint Software

CHKPF

$ 44.19

17%

$ 37.69

Network Associates

NETA

$ 14.56

16%

$ 12.56

USWeb

USWB

$ 26.13

15%

$ 22.63

Verisign

VRSN

$ 56.00

11%

$ 50.56

Exodus

EXDS

$ 76.63

7%

$ 71.63

Prodigy

PRGY

$ 24.06

2%

$ 23.50

CDnow

CDNW

$ 18.75

2%

$ 18.44

VocalTec

VOCLF

$ 10.69

-1%

$ 10.75

Lycos

LCOS

$ 92.75

-1%

$ 94.00

Cisco

CSCO

$ 107.06

-1%

$ 108.63

Excite

XCIT

$ 133.00

-4%

$ 138.19

GeoCities

GCTY

$ 100.13

-5%

$ 105.50

Broadvision

BVSN

$ 51.88

-6%

$ 55.00

PSINet

PSIX

$ 43.50

-7%

$ 46.56

eBay

EBAY

$ 166.50

-8%

$ 181.25

Open Market

OMKT

$ 11.75

-9%

$ 12.88

Security Dynamics

SDTI

$ 18.69

-10%

$ 20.72

Inktomi

INKT

$ 96.75

-10%

$ 108.00

Broadcast.com

BCST

$ 103.50

-11%

$ 116.00

America Online

AOL

$ 113.13

-11%

$ 127.13

Infoseek

SEEK

$ 39.56

-12%

$ 44.94

Yahoo!

YHOO

$ 138.19

-13%

$ 159.25

@Home Network

ATHM

$ 117.56

-13%

$ 135.69

Sportsline USA

SPLN

$ 32.88

-13%

$ 38.00

CNET

CNET

$ 50.13

-14%

$ 58.00

CyberCash

CYCH

$ 13.25

-15%

$ 15.50

Network Solutions

NSOL

$ 59.25

-15%

$ 69.50

Security First Technologies

SONE

$ 40.38

-15%

$ 47.50

Egghead.com

EGGS

$ 11.00

-19%

$ 13.50

CMG Info

CMGI

$ 96.25

-20%

$ 119.75

Mindspring

MSPG

$ 70.50

-20%

$ 88.00

Concentric

CNCX

$ 32.31

-20%

$ 40.63

Earthlink Network

ELNK

$ 50.72

-21%

$ 64.00

Verio

VRIO

$ 50.00

-22%

$ 64.00

Beyond.com

BYND

$ 19.50

-22%

$ 25.06

Infospace.com

INSP

$ 43.88

-23%

$ 57.00

Cyberian Outpost

COOL

$ 10.75

-23%

$ 14.00

E*TRADE

EGRP

$ 39.31

-24%

$ 51.50

Doubleclick

DCLK

$ 91.94

-24%

$ 120.94

Go2Net

GNET

$ 98.44

-25%

$ 130.75

Amazon.Com

AMZN

$ 105.81

-26%

$ 143.00

Onsale

ONSL

$ 18.25

-30%

$ 26.00

Xoom.com

XMCM

$ 47.00

-30%

$ 67.31

Preview Travel

PTVL

$ 16.63

-31%

$ 24.25

iVillage

IVIL

$ 45.25

-32%

$ 66.88

RealNetworks

RNWK

$ 65.38

-35%

$ 100.78

24/7 Media

TFSM

$ 26.50

-37%

$ 42.00

ISS Group

ISSX

$ 26.63

-47%

$ 50.50

News behind the moves:

  • 99.06.01 – E*TRADE (NASDAQ:EGRP) makes s $1.8 billion stock offer
    for Web-based bank Telebanc. Investors react unfavorably, driving down EGRP
    11.66% to $39 5/16 per share. Also hurting EGRP is Merrill Lynch’s new
    Internet effort. I see Schwab in front with Merrill perhaps catching up in
    24 months. It should have just acquired E*TRADE. Because my thinking is
    that Merrill may waste time trying to figure out the Net.

  • 99.05.27 – InfoSpace.com (NASDAQ:INSP) jumps 16% to $44 7/8
    per share on the news that 700 Web sites will use its ActiveShopper
    shopping engine.

  • 99.05.26 – StarMedia prices 7 million shares at $15, opens at $25
    3/16, goes as high as $30 and closes at $26 1/16, up 74%. This IPO looks
    like a more “traditional” Internet offer, less speculative runup the first
    day but still a healthy run, especially vs. the weaker performing IPOs
    today: Edgar-Online, Ziplink, Juno. Only DLJDirect joins StarMedia above
    the noise of offerings.

  • 99.05.26 – RealNetworks (NASDAQ:RNWK) jumps 21% to $70 3/16 per
    share as an Internet mutual fund reportedly buys into the software
    streaming firm. I would like to see RealNetworks consider some strategies
    to becoming a service firm (as in a multimedia network), perhaps divesting
    all or part of its software side or aligning its software side
    strategically with a larger concern.

    Why? Microsoft keeps pounding the
    software angle but it’s much harder to win against a service. That’s why
    AOL and Yahoo have beat Microsoft so far, they are “services” and not
    “software.”

  • 99.05.14 – CheckPoint (NASDAQ:CHKP) climbs 10.5% to $45 5/16 per
    share as the Internet security software firm announces two new products in
    as many days. One addresses the virtual private network space while the
    other the public key infrastructure space.

    I’ve been waiting for a loooong time for CHKP to break out and glad to see
    my faith. This is one I’ve waited for for more than two years to find some
    running room.

    Security software in general has been a dog sector but of all of them I see
    CheckPoint and Security Dynamics (NASDAQ:SDTI) as having the most
    potential. Network Associates has some also if it can get past shareholder
    lawsuits.

  • 99.05.11 – CMGI (NASDAQ:CMGI) stock is held by FMR, Fidelity’s
    parent company, which announces it holds a 10.3% stake in CMGI. Interesting
    if you recall January 6 in my outlook report of hot stocks to watch for ’99
    that I mentioned any portfolio manager that didn’t have CMGI in its
    portfolio should retire. Fidelity apparently listened.

    The question now is: Is CMGI fully valued? I can see the way clear to CMGI
    being valued at double its current level. To me this is not a earnings
    story it’s a holding company story. With CMGI you get a basket of Internet
    firms in one stock.

  • 99.05.11 – NBC (NYSE:GE) agrees to acquire Xoom.com (NASDAQ:XMCM),
    and combine it with CNET’s Snap (NASDAQ:CNET) into a new firm called NBCi,
    a new Internet company. It will include NBC.com, NBC’s station affiliate
    Web effort Interactive Neighborhood, multimedia site Videoseeker.com, and a
    10% of soon-to-be beefed up CNBC.com. Pro forma, assuming debt conversion
    by NBC into equity, who owns what: NBC 53%, Xoom.com 34%, CNET and Snap.com
    13%. More and more I think these TV-Web deals could accelerate.


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