The strong rally that began early Wednesday may have lost its steam by the time the market closed, but it still left Internet stocks considerably higher by the end of the day.
Indeed, in this year’s opening weeks, ‘Net tickers clearly are outperforming the Nasdaq, as measured by internet.com’s Internet Stock Index, or ISDEX.
Through Wednesday’s trading, the 50-member ISDEX is up 12.8% in the nascent days of 2001, while the Nasdaq has gained 8.6%.
Obviously, this could change in a day, but after nine months of watching ‘Net stocks lag behind other issues, Internet investors may have reason to feel optimistic that the worst is behind them. If not, then they should at least enjoy the moment.
All told, 33 of the 50 ISDEX stocks are up in 2001, with seven having gained more than 50% and another 12 rising more than 30%.
Here’s a list of the top ISDEX gainers in the year to date:
TICKER Company %Gain Sector
Earthlink 80.1 ISPs/Access Providers
E*Trade Group 70.3 Financial Services
GoTo 62.4 Search/Portals
At Home 54.8 ISPs/Access Providers
Sapient 53.9 Consultants/Designers
Broadcom 53.2 Speed/Bandwidth
Razorfish 51.2 Consultants/Designers
S1 Corp. 47.6 Security
BroadVision 46.0 E-commerce Enablers
Net2Phone 43.2 Performance Software
Ameritrade 41.1 Financial Services
Homestore.com 40.4 Content/Communities
AOL-Time Warner 40.2 Search/Portals
Terra Networks 35.2 ISPs/Access Providers
DoubleClick 33.5 Advertising/Marketing
TicketMaster 32.9 E-tailers
Sycamore Networks 32.7 Speed/Bandwidth
eBay 31.1 E-tailers
Red Hat 30.1 Performance Software
One thing that jumps out at me is 12 of the 13 Internet sectors are represented. Only Wireless is missing; ironic given the continued buzz around that sector.
So It’s Come To This
So bad is the cash burn problem facing hundreds of Internet companies, that a “national consulting company” has taken to indiscriminately spamming e-mail boxes and Web message boards, offering their services in “reducing problem debts.”
The company, which will remain anonymous, assures potential customers that it “typically reduces our client’s accounts payable and other debts to less than 20 cents on the dollar.” It even includes a handy form you can print out and fax back. (Which, if I recall correctly, was the standard procedure a couple of years ago for receiving venture capital.)
Tip for the “national consulting company”: The readers at gameprogrammers.com and the Proto Typing Information and Technical Forum probably aren’t your ideal target audience.
Tip for everyone else: If these guys also offer to underwrite your IPO, run the other way. In fact, run the other way anyway.