Given the news that has rocked the markets this week, tech and Internet stocks are hanging fairly tough, despite further slippage.
But like residents of the Northeast snowed under by a two-day storm – with another blast due on Friday – ‘Net tickers have a lot of digging out to do, and can’t count on any help from the short-term forecast.
In the early days of March, the Nasdaq is up by 0.8%, closing Thursday at 2168, while internet.com’s Internet Stock Index, or ISDEX, has edged down 2.9% to 266. For the year to date, the Nasdaq has lost 12.2%, while the ISDEX has plunged 26.3%.
Let’s look at this week’s big movers and headline-grabbers on the ISDEX:
First and foremost, of course, is Yahoo , which shocked investors after Wednesday’s market close by announcing the resignation of CEO Tim Koogle – employee No. 7 at the company and the man widely credited with steering it to the top of the portal pile – and issuing a drastic revenue and earnings warning for Q1.
YHOO shares fell 15.5% to $17.69 on Thursday, and in an apparent bid to allay investor concerns, the company CFO said Yahoo is “committed to achieving break-even profitability” this year. Hardly reassuring words, considering the company in January said it expected profits in 2001 of 33 cents to 43 cents per share. And there’s something about the “committed” part of this (as in “we’ll try out best, but there are no guarantees”) that strikes me as worrisome.
Despite slightly losing ground in the past two days, shares of network infrastructure provider Asia Global Crossing lead the ISDEX this week with a 22.3% gain. There was no specific catalyst involved in AGCX’s rise, unless it was a partial reaction to the stock’s 39% drop in February. Asia Global Crossing is up 20% this year.
Internet billing software provider Portal Software rose 20.5% in the week of trading ended Thursday, thanks to news of several alliances and a contract with Time Warner cable. The surge helped erase most of PRSF’s losses since it announcing two weeks ago that it would miss earnings estimates for the first two quarters. PRSF is up 12.3% year-to-date.
Amazon.com had its own excitement over the weekend as a British newspaper reported the slumping e-tailer was in strategic-alliance talks with global retailing giant Wal-Mart. AMZN shares jumped 26.3% to $12.63 on Monday in reaction to the rumor, but stalled out after the Wall Street Journal reported on Tuesday that no deal was imminent. Still, Amazon.com closed Thursday at $11.69, giving it a gain of 12.0% for the past week. AMZN is down 21.3% this year.
The biggest loser on the ISDEX this week is e-commerce software maker Art Technology Group , which was one of the fallout victims from Oracle’s revenue warning on March 1. ARTG shares nosedived 29.6% to $19.94 in the week ended Thursday amid a slew of analyst downgrades. About a dozen other software companies also had their ratings cut after Oracle said it would miss estimates for the first time in three years. ARTG shares are down 14.7% YTD.
