Internet stocks performed better this week than they had in the early part of February, but still ended up losing ground as investors adjusted to the sobering reality that the economy won’t be regaining momentum in the foreseeable future.
Despite two consecutive days of solid gains, internet.com’s Internet Stock Index, or ISDEX, slipped 1.4% to 363 in the week of trading ended Thursday. The Nasdaq fell 2.1% in the same period.
The ISDEX has lost 13.8% so far in February, and for the year remains barely above its break-even point of 361. The Nasdaq, meanwhile, is down 7.9% this month, and up 3.4% since the final trading bell of 2000.
Let’s look at some of the ISDEX’s big movers:
Internet real-estate listing network Homestore.com
soared 16.8% to $34.97 on Thursday, making it the top ISDEX stock for the day and the past week (up 19.0%). HOMS was one of five companies singled out in a client report by Merrill Lynch Internet analyst Henry Blodget as a good buy.
However, before we ascribe HOMS’ ticker ascent to the Blodget magic, it’s worth noting that two of the other four were among the biggest losers on the ISDEX Thursday: DoubleClick tumbled 5.3%, while GoTo lost 5.7%.
What moved investors instead was news that the U.S. Department of Justice won’t try to stop Homestore.com’s acquisition of Cendant’s Move.com for $900 million. HOMS controls 90% of the online home-listing market, drawing the attention of the feds as far back as last spring. The Move.com sale is set to close next week.
Online financial information provider Multex.com
continues its steady ascent, gaining 14.4% in the past week. Since bottoming out at $8.41 on Dec. 4, MLTX has been one of the hottest Internet stocks on the board, posting a 159% advance to $21.81. (Don’t they know this isn’t 1999?)
On Tuesday, Multex.com announced it had expanded its financial news and information offerings for wireless subscribers. More significantly, MLTX said Thursday that it expects to hit Wall Street estimates for 2001 revenues. Given the low-balling emanating from Internet executive suites these days,
that’s a positively bullish forecast.
Internet Security Systems
halted five straight days of descent with two monster sessions, gaining 24.7% on Wednesday and Thursday. Boosting ISSX was a joint venture with Softbank and security software provider Trend Micro to invest in a Chinese Web security company, as well as the initiation of coverage by Lehman Brothers with a “strong buy” rating. Lehman set a 12-month price target of $80 per share. ISSX finished Thursday just below that mark, at $77.56.
Wireless infrastructure provider InfoSpace
failed to impress the market this week with predictions that its 2001 loss will be much smaller than expected. That’s because the company had to lay off 20% of its staff in the past two weeks to even begin to accomplish that goal. And the company still says it will finish in the red, though CEO Naveen Jain predicts a return to pro forma profitability by Q3.
InfoSpace continues to probe new depths, reaching $3.50 this week – the stock’s lowest price since closing at $3.34 on Dec. 16, 1998, its second day of trading. INSP’s 52-week high? Try $138.50, back in March.