Down 25% Past Week: ISDEX Scorecard After The Twister

Like a scene from the movie “Twister,” storm chasing around through
Internet stocks for the week August 25 through September 1 was akin to
watching flying cows (bulls perhaps) being taken in the funnel only to be
hurled into bear burgers on the other side.


ISDEX lost 25% of its value as
the storm showed signs–finally–of settling Tuesday when the group of
50 industry bellwethers posted a 7% gain.


Monday, August 31, was the real
suction sound causing ISDEX to fall a record 15% in one trading day. The
storm clouds began gathering July 20, however, as ISDEX began to slip
gradually from a July 7 spike reminiscent of the April “everybody loves
Internet stocks” party when ISDEX hit its all-time high of 185.66. That
means ISDEX as of September 1 is off 50% from its high.


Leading the
selloff was CMG Info (NASDAQ:CMGI) down 41% since August 25 to $42 per
share. Its sizable stakes in GeoCities and Lycos exposed it to the
volatility in those two stocks also, as did its stable of private
investments in Internet startups.


Still, we think CMGI represents one of
the best ways to invest in the industry in one stock. It’s like having a
public venture capital fund focused on Net firms. If you want to arbitrage
the value between private and public companies in this industry, CMGI
provides one of the few choices.


Of the overall industry bellwether index on Wall Street, Mecklermedia’s
ISDEX shows only two of the 50 on the plus side for the week of August 25
to September 1:
IP telephony service IDT (NASDAQ:IDTC) and VocalTec
(NASDAQ:VOCLF), an IP communications software maker.


Check the damage report, which may turn into a shopping list for investors
who wished they had bought in late 1997 to see the 180 to 186 ISDEX high
reached in April and July (also known as a “taking profit time”).





















































































































































































































































































































































































































































































































ISDEX ®

 

01-Sep-98

% change

Point change

% change

The Internet Stock Index

 

close

from

from

from

www.isdex.com

 

 

25-Aug-98

25-Aug-98

31-Dec-97

 

 

 

 

 

or from IPO*

ISDEX Geometric Average

 

93.20

-24.9%

-30.84

-6.7%

ISDEX Price Wtd. Composite

 

1,213.08

-27.5%

-461.27

33.4%

NASDAQ

 

1,575.14

-12.4%

-223.03

0.3%

DJIA

 

7,827.43

-9.0%

-775.22

-1.0%

 

 

 

 

 

 

IDT Corp

IDTC

$16.00

4%

$0.63

-21%

VocalTec

VOCLF

$8.25

3%

$0.25

-60%

Broadvision

BVSN

$21.25

-2%

-$0.38

227%

Verisign

VRSN

$30.00

-2%

-$0.75

114%

Yahoo!

YHOO

$72.25

-3%

-$2.00

109%

Security First Net Bank

SFNB

$12.88

-5%

-$0.63

78%

CNET

CNWK

$43.13

-8%

-$3.88

185%

CyberCash

CYCH

$8.38

-9%

-$0.81

-34%

Broadcom*

BRCM

$59.81

-10%

-$6.94

149%

Open Market

OMKT

$9.91

-10%

-$1.16

3%

Mecklermedia

MECK

$22.50

-13%

-$3.38

-10%

Verio*

VRIO

$21.38

-15%

-$3.75

-7%

Spyglass

SPYG

$12.38

-16%

-$2.31

151%

Axent

AXNT

$15.88

-18%

-$3.44

-8%

CKS Group

CKSG

$14.13

-19%

-$3.38

0%

CheckPoint Software

CHKPF

$19.25

-20%

-$4.81

-53%

Security Dynamics

SDTI

$10.09

-20%

-$2.53

-72%

Sportsline USA

SPLN

$20.06

-22%

-$5.56

87%

@Home Network

ATHM

$33.50

-22%

-$9.47

33%

America Online

AOL

$86.25

-22%

-$24.50

91%

USWeb

USWB

$14.44

-22%

-$4.19

54%

Network Solutions

NSOL

$27.75

-23%

-$8.13

111%

Open Text

OTEXF

$11.13

-23%

-$3.38

-17%

Network Associates

NETA

$32.06

-24%

-$9.94

-39%

Netscape

NSCP

$21.13

-24%

-$6.69

-13%

Onsale

ONSL

$18.00

-24%

-$5.75

0%

Egghead.com

EGGS

$7.19

-24%

-$2.31

11%

Cylink

CYLK

$7.94

-24%

-$2.56

-19%

Secure Computing

SCUR

$7.25

-25%

-$2.38

-39%

PSINet

PSIX

$12.50

-25%

-$4.25

144%

Mindspring

MSPG

$30.25

-26%

-$10.38

170%

N2K

NTKI

$8.13

-27%

-$3.06

-44%

ISS Group*

ISSX

$27.25

-27%

-$10.31

24%

24/7 Media*

TFSM

$9.13

-28%

-$3.50

-35%

CDnow

CDNW

$9.00

-28%

-$3.50

-44%

Lycos

LCOS

$26.75

-28%

-$10.41

29%

E*TRADE

EGRP

$17.88

-29%

-$7.44

-22%

Exodus*

EXDS

$26.75

-31%

-$11.75

78%

Inktomi*

INKT

$51.38

-32%

-$24.13

185%

Concentric

CNCX

$15.13

-32%

-$7.25

70%

Infoseek

SEEK

$17.94

-33%

-$8.94

67%

WavePhore*

WAVO

$5.31

-34%

-$2.69

-43%

Doubleclick

DCLK

$24.75

-35%

-$13.06

46%

Broadcast.com*

BCST

$35.25

-35%

-$19.00

96%

GeoCities*

GCTY

$21.38

-35%

-$11.56

26%

Earthlink Network

ELNK

$26.75

-39%

-$16.75

108%

RealNetworks

RNWK

$17.50

-39%

-$11.00

26%

Amazon.Com

AMZN

$79.95

-39%

-$51.67

165%

Excite

XCIT

$24.00

-41%

-$16.38

60%

CMG Info

CMGI

$42.00

-41%

-$29.13

178%

* change from IPO 1998

 

 

 

 

 

TOTAL

 

1,171.08

-24%

-371.11

33%

SIMPLE AVERAGE

 

23.90

-24%

-7.57

33%



On the plus side, the newbie Internet IPOs, shown in Internet.com’s IPO
Index below, are up 43% as a group despite the mix of gainers and decliners
divided. Of all Internet IPOs, those that solved bandwidth bottlenecks
fared best.


>From its IPO pricing June 10 of this year to September 1 close, Inktomi
(NASDAQ:INKT) leads all comers at 185% run from its $18 per share.


INKT’s strength has been a two-fold product approach, search
wholesaling and network caching.


Broadcom (NASDAQ:BRCM) attacks the
broadband chip arena with a market leadership position selling its silicon
to the cable and telco firms for fatter access. Similarly, Exodus
(NASDAQ:EXDS) solves some bandwidth issues as a mirror site for major Web
services and sites.




























































































































Internet.com’s

Ticker

Share price

% change

% change

IPO Index

symbol

9/1/98

8/25-9/1

from IPO

Inktomi

INKT

$51.38

-32%

185%

Broadcom

BRCM

$59.81

-10%

149%

Broadcast.com

BCST

$35.25

-35%

96%

Exodus

EXDS

$26.75

-31%

78%

GeoCities

GCTY

$21.38

-35%

26%

ISS Group

ISSX

$27.25

-27%

24%

NetGravity

NETG

$9.44

-26%

5%

Digital River

DRIV

$6.25

-26%

-26%

24/7 Media

TFSM

$9.13

-28%

-35%

WavePhore

WAVO

$5.31

-34%

-43%

CDnow

CDNW

$9.00

-28%

-44%

Cyberian Outpost

COOL

$9.38

-35%

-48%

 

 

 

 

 

TOTAL

 

270.31

 

 

AVERAGE

 

22.53

-28%

43%


GeoCities (NASDAQ:GCTY) holds potential as a consumer of that bandwidth,
with the millions of people using its service to publish their own Web
pages for free. The market for do-it-yourselfers is new but we think its
pioneering role could lead to earnings within two years.


Users count, they are one way of discounting ad and marketing revenue for
the future.
Also, we think the community/Websteader space may be a closer parallel to
real-world interaction than using just guides or search.


On the list of
decliners, a handful of e-tailers bit the dust from IPO price. E-tail margins
are thin to nil and we suspect Amazon (NASDAQ:AMZN) valuation could
continue to fall as that becomes more apparent.


Stormwatching fans are encouraged to check the weather on Internet
stocks as the storm came and went via these links:


 




Special ISDEX market moves coverage
recap:


ISDEX
all-time high and
low
| ISDEX
weakens
Aug 27 |
last Thursday initial plunge
; market
close tally
|


Monday
massacre

morning
;
& then afternoon|
Top 10
decliners
Aug 31









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