The red ink that continues to flow from Q2 earnings reports pushed Internet
stocks even further under water in the week of trading ended Wednesday.
This steep decline is reflected in internet.com’s Internet Stock Index, which fell
11.3% (from 771 to 684) and saw only one company, SportsLine.com ,
gain for the week.
At the other end of the list, things are a bit more crowded, with nine ISDEX
stocks posting losses of at least 20%.
For the year, the ISDEX is down 20.5% from its Dec. 31 close of 860.
Individually, only nine ISDEX stocks are up in the YTD, while 17 have lost
60% or more.
Can the ISDEX move back into the black by the end of 2000? Sure it can. In
fact, before the slump that has gripped ‘Net tickers since mid-July, the
ISDEX had clawed its way to a July 17 close of 837, less than 3% below
break-even.
And with a disproportionate number of profitable market leaders among its
members, the ISDEX as a whole should fare well once the dust from Q2 settles
and more investors are comfortable separating the winners from the losers.
Not that there aren’t seriously endangered stocks in the group. Unless
something changes drastically, it looks as though investors have given up on
Intraware , eToys
and Open Market
, which
for the year are down 90%, 84% and 85%, respectively. Other companies, such
as Excite@Home and
GoTo.com , down 68%
and 73%, respectively, also may have a hard time rekindling investor
support for their shares.
But the strong outnumber the weak on the ISDEX. Companies such as online
auction giant eBay ,
digital certificate and Internet services provider VeriSign , Internet
streaming multimedia software leader RealNetworks , America Online
and Yahoo!
are among the
many profitable ‘Net players down anywhere from 20% to 40% this year. When
the shakeout phase ends, and that could happen as soon as September or as
late as sometime next year, these are the kinds of companies that will
attract strong support from the market.
Here are the ISDEX’s 10 biggest losers for the week:
S1 Corp.-40.2% InfoSpace-34.2% Intraware-32.3% Net2Phone-24.6% EarthLink-24.3% Portal Software-22.4% eToys-22.1% Juniper Networks-20.8% VeriSign-20.0% PSINet-19.5%
