Net Stocks Take Another Dive

More bad news emerged for Internet investors Friday as the sector was again hit hard due in part to negative news from two prominent names.

At noon Eastern,’s Internet Stock Index had dove 44.97, or 4.74 percent, to 904.60, the Nasdaq Composite was off 47.66 to 4,410.23 and the Dow Jones industrial average had gained 4.34 to 10,984.59.

Big losers included Inc. (KOOP), diving 2-11/16 to 3-9/16. A report from the online medical site’s auditors, released Friday, expressed “substantial doubt” about the firm’s long-term viability.

eBay Inc. (EBAY), had plunged 27-9/16 to 179-7/16. The online auctioneer was subpoenaed by the U.S. Justice Department. Although the details of the action were not released, it is suspected to be part of a price-fixing investigation into Sotheby’s Holdings Inc. and Christie’s International Plc.

E.spire Communications Inc. (ESPI) had lost 4-3/16 to 5-1/2. The provider of voice and data services Friday announced it had hired Morgan Stanley Dean Witter to examine fund-raising options. The firm is also delaying the release of its final 1999 financial statements.

Even IPOs weren’t being spared investor wrath. NV (TRDR) had lost 9-7/8 to 18-11/16 shortly after its debut. The Dutch-based publisher of Internet classified ads sold 13 million shares at $28.56, raising $371.3 million.

There were several pieces of good news despite all the red. Net2Phone Inc. (NTOP) had leaped 5-5/8 to 61. A group led by AT&T took a 39 percent stake in the company. Yahoo! Inc. also made a substantial investment. Inc. (PASA) had gained 1-7/16 to 6-13/16. Computer maker Gateway Inc. (GTW) took a $10 million stake in the firm, which publishes a portal aimed at Hispanics in the United States.

Avenue A Inc. (AVEA) had climbed 2-1/4 to 31-1/2. Thomas Weisel Partners initiated coverage of the Internet ad firm with a “strong buy.”

There was also good news to report on the day’s other IPO already trading. ValueClick Inc. (VCLK) had jumped 2-1/8 to 21-1/8. The online ad firm sold 4 million shares at $19.

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