Electric: Internet Stocks Gain 18% in Past Week

Just when it looked like Internet stocks would wilt from the summer heat
Wall Street turns on the summer of love. Said another way, if Bob Dylan
sang this one it’d be “knock knock knockin’ on heaven’s door,” as ISDEX,
Internet Stock Index, climbed a phenomenal 18% since June 16.


We count the price-weighted ISDEX in the tally but even the geometric
average showed 13% upside. Causing the fete de ‘Street was a handful of
stocks in each sector. We painstakingly divided up ISDEX’s 50-strong band
of angels into understandable groups in the table below: content, access,
commerce retailers, commerce-enablers, navigation, software, security, IP
communications, and high-speed solutions.


In true Internet fashion, the lines between them blur here and there where
any one firm is a hop away from getting into a new revenue stream by
offering similar services or sellthrough.


More Than a Little Wing: ISDEX June 16 – 23














































































































































































































































































































































































































































































































































































































































































































































Mecklermedia’s

 

23-Jun-98

% change

Point change

ISDEX ®

 

close

from

from

The Internet Stock Index

 

 

16-Jun-98

16-Jun-98

where Wall Street meets the Web

 

 

 

 

ISDEX Geometric Avg.

 

150.88

13.1%

17.52

ISDEX Price Wtd.

 

1,695.41

18.4%

263.78

NASDAQ

 

1,844.57

5.2%

91.45

DJIA

 

8,828.46

1.9%

163.17

 

 

 

 

 

 

 

 

 

 

CONTENT

 

 

 

 

CNET

CNWK

$67.56

48%

$22.06

Sportsline USA

SPLN

$36.00

20%

$5.88

WavePhore

WAVO

$12.63

9%

$1.00

Mecklermedia

MECK

$21.00

3%

$0.63

NewsEdge

NEWZ

$8.75

-35%

-$4.63

TOTAL

 

$145.94

 

$24.94

WEIGHTED AVERAGE

 

$29.19

25%

$4.99

 

 

 

 

 

ACCESS/SERVICES

 

 

 

 

Earthlink Network

ELNK

$76.38

32%

$18.38

Mindspring

MSPG

$78.38

31%

$18.63

PSINet

PSIX

$12.75

23%

$2.38

Concentric

CNCX

$27.00

14%

$3.38

Metricom

MCOM

$8.75

-5%

-$0.50

TOTAL

 

$203.25

 

$42.25

WEIGHTED AVERAGE

 

$40.65

26%

$8.45

 

 

 

 

 

COMMERCE RETAILERS

 

 

 

 

Amazon.Com

AMZN

$92.69

26%

$19.06

N2K

NTKI

$18.50

25%

$3.75

Onsale

ONSL

$27.50

24%

$5.38

CDnow

CDNW

$18.88

10%

$1.69

E*TRADE

EGRP

$21.13

1%

$0.22

Egghead.com

EGGS

$8.13

-2%

-$0.13

TOTAL

 

$186.81

 

$29.97

WEIGHTED AVERAGE

 

$31.14

19%

$4.99

 

 

 

 

 

 

 

 

 

 

COMMERCE ENABLERS

 

 

 

 

CMG Info

CMGI

$60.75

33%

$15.13

USWeb

USWB

$23.81

24%

$4.56

Network Solutions

NSOL

$44.38

20%

$7.38

Doubleclick

DCLK

$43.19

19%

$6.75

CheckFree

CKFR

$27.31

14%

$3.38

CyberCash

CYCH

$14.50

3%

$0.44

CKS Group

CKSG

$20.75

-1%

-$0.25

TOTAL

 

$234.69

 

$37.38

WEIGHTED AVERAGE

 

$33.53

19%

$5.34

 

 

 

 

 

 

 

 

 

 

NAVIGATION/AGGREGATORS

 

 

 

 

Excite

XCIT

$82.75

23%

$15.44

Yahoo!

YHOO

$148.06

21%

$26.13

Lycos

LCOS

$68.75

21%

$12.00

America Online

AOL

$106.25

19%

$17.25

Intuit

INTU

$57.50

15%

$7.31

@Home Network

ATHM

$39.25

6%

$2.25

Infoseek

SEEK

$30.44

-8%

-$2.69

TOTAL

 

$533.00

 

$77.69

WEIGHTED AVERAGE

 

$76.14

17%

$11.10

 

 

 

 

 

SOFTWARE

 

 

 

 

RealNetworks

RNWK

$36.00

39%

$10.06

Broadvision

BVSN

$19.44

19%

$3.13

Open Market

OMKT

$18.13

19%

$2.88

Spyglass

SPYG

$11.50

14%

$1.38

Netscape

NSCP

$26.19

8%

$1.91

Open Text

OTEXF

$15.19

-3%

-$0.44

Versant Object Technologies

VSNT

$4.38

-4%

-$0.19

TOTAL

 

$130.81

 

$18.72

WEIGHTED AVERAGE

 

$18.69

17%

$2.67

 

 

 

 

 

 

 

 

 

 

SECURITY

 

 

 

 

Verisign

VRSN

$38.25

41%

$11.13

Cylink

CYLK

$10.44

16%

$1.44

Network Associates

NETA

$45.31

11%

$4.44

Axent

AXNT

$29.38

10%

$2.69

Cyberguard

CYBG

$8.88

8%

$0.69

Security First Net Bank

SFNB

$10.50

6%

$0.56

Secure Computing

SCUR

$9.00

4%

$0.38

CheckPoint Software

CHKPF

$28.63

3%

$0.88

Security Dynamics

SDTI

$17.09

-10%

-$1.91

TOTAL

 

$197.47

 

$20.28

WEIGHTED AVERAGE

 

$21.94

11%

$2.25

 

 

 

 

 

IP COMMUNICATIONS

 

 

 

 

IDT Corp

IDTC

$28.00

9%

$2.38

VocalTec

VOCLF

$11.63

7%

$0.75

TOTAL

 

$39.63

 

$3.13

WEIGHTED AVERAGE

 

$19.81

9%

$1.56

 

 

 

 

 

HIGH-SPEED SOLUTIONS

 

 

 

 

PairGain

PAIR

$19.13

38%

$5.25

Broadband Technologies

BBTK

$4.69

-4%

-$0.19

TOTAL

 

$23.81

 

$5.06

WEIGHTED AVERAGE

 

$11.91

27%

$2.53

 

 

 

 

 

 

 

 

 

 

OVERALL TOTAL

 

3,673.80

18%

562.70

SIMPLE AVERAGE

 

54.03

18%

8.28


Much of the movement stems from the geekfest brewing striking a chord. We
reiterate the way the mergermania and plain old common sense pairings could
play out in the next 18 to 24 months on our back of the napkin scribble
that looks like this:


AT&T + Yahoo; Sprint + Earthlink + Excite; MCI + Mindspring + Lycos; NBC +
CNET 100%; Time Warner + AOL; IBM or Sun + Netscape.


What we have look like disparate elements of the same goal = a complete or
rounded Internet experience. This scenario is speculation but we suspect
may range from partnering to full acquisition.

A closer look at the pops and drops:


  • CNET (NASDAQ:CNWK) continues to find favor after its June 9
    agreement whereby NBC will acquire 4.99% in CNET for $26 million and a 19%
    ownership stake in Snap! CNWK was a $30-$35 stock before the deal fever
    began. Closes June 23 at $67.56 per share.

  • Earthlink (NASDAQ:ELNK) and Mindspring (NASDAQ:MSPG) give more of
    the right stuff that got them to the top of the access heap this year;
    Earthlink through new marketing arrangements and Mindspring through a
    relentless acquisition spree that goes on and on and on with the latest
    being ISPs in Florida and Louisiana.

  • Amazon (NASDAQ:AMZN) more than doubled since we wrote our report on
    its possible room to go up in the April
    24th
    edition of Internet Stock Report. The big deal was music, backed
    up by deep pockets through its $325 million bond placement. Rivals CDnow
    (NASDAQ:CDNW) and N2K (NASDAQ:NTKI) also post positive percentages. We
    expect a showdown in the exclusive sponsor space as Amazon, which bought
    the book space on many high-traffic sites, bumps deals with the other two,
    both of which bought the music sponsorship on many of the same sites.

  • Having spurned Zapata’s fruitless bid, Excite (NASDAQ:XCIT) seems to
    be the target of target talk. Especially since peer Infoseek (NASDAQ:SEEK)
    sells almost half of itself to Mickey Mouse for what looks like “Mickey
    Mouse” prices–we figure $15.27 per share. See ISR Archives, June
    19
    for that. Impatient SEEK shareholders may want to consider, however,
    what future value Disney brings to SEEK before e-mailing the bearded ladies
    investment club for advice (as you may have heard, they are off a few
    percents here and there).


    The driver behind Internet stocks these days is deals and steals. All along
    the watchtower investors listen for the next act to take center stage.
    Content? Commerce? Security? The latter seems overdue for a tune.

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