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Internet Market Close Report for 1998.07.10

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Jul 10, 1998

	10-Jul-98	point change	% change
ISDEX	162.96	0.51	0.31%
ISDEX Price Wtd.	1,812.75	-16.72	-0.91%
NASDAQ	1,943.04	3.22	0.17%
DJIA	9,105.74	15.96	0.18%

Egghead.com (NASDAQ:EGGS) goes higher yet as a press release not from the company but from someone claiming to be an investor in it targets EGGS capitalization at $2 billion or $85 per share. We differ. Egghead is no Amazon.com (NASDAQ:AMZN) and it needs some work on its auction Web site. We couldn’t order last time we tried to. We think EGGS has closed the value gap between it and closest peer ONSALE (NASDAQ:ONSL). Between the two we believe Onsale’s site and commerce experience is superior.

Although we’ve long been a believer in Egghead, and we were the only ones for the past six months saying it could be a $500 million market cap company, we’re satisfied that the run finally came. If EGGS can keep growth strong we think it could be a $1.2 billion company in 12 months. To keep going we believe Egghead must up the ante, and that may mean acquiring other Web services to open more revenue and future earnings flow. EGGS closes up 26% today at $21.44 as most traded issue. It’s gained more than 175% past week and is well higher than its 52-week low of $3.81 per share.

E*TRADE (NASDAQ:EGRP) inks a $400 million deal to sell shares to Softbank at $25.56 per share, giving the Japanese media giant 27.2% stake in the Web-based brokerage. E*TRADE (NASDAQ:EGRP) shares close down 4% at $24.50. E*TRADE is in the midst of trying to expand globally and in its offerings.

The size of the deal correlates to the types of deals done in the top tier these days: Amazon’s $325 million bond placement, PSINet’s $600 million bond placement, Yahoo’s $250 million private placement with Softbank, AOL’s $500 million common offer. The stakes for #1 are going up as the pockets to pay for them are getting deeper. They have the “Web” aspect, now it’s time for “World Wide” and that takes hundreds of millions.

WavePhore (NASDAQ:WAVO) shares rally on an article in Business Week that calls it an “undervalued” Internet stock. When WAVO was added to ISDEX this year we did so on the vision that it represented a data broadcast model well suited for widespread Internet news distribution. That belief remains.

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Internet Market Close Report for 1998.07.10

Steve Harmon

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