The oft-repeated axiom that size matters must be recast as security
matters, and it’s about time. All year long we’ve said security could find
legs and until recently all it had was weak knees. Since December 1,
however, our breakout of ISDEX by sector shows that security led the way,
up 16.3% while ISDEX overall went sideways with a slight gain.
Why
security, why now? Once Internet stock fans stampeded through e-tailers in
mid-November and then enablers around the end of November, about the only
thing left from being focused on was security–the very nuts and bolts of
making sure e-tail and e-commerce is secure. Here’s the handy table (share
this with a friend as an easy way to see how Internet sectors perform)–
ISDEX ® | 08-Dec-98 | % change | Point change | |
The Internet Stock Index | close | from | from | |
www.isdex.com | 01-Dec-98 | 01-Dec-98 | ||
ISDEX | 231.71 | 0.7% | 1.56 | |
NASDAQ | 2,034.75 | 3.5% | 68.87 | |
DJIA | 9,027.98 | -2.9% | -273.17 | |
ISDEX by group | ||||
E-tailers | ||||
Amazon.com | AMZN | $204.06 | -2.6% | -$5.44 |
Beyond.com | BYND | $26.00 | 4.5% | $1.13 |
Cdnow | CDNW | $19.00 | -16.5% | -$3.75 |
Cyberian Outpost | COOL | $26.06 | -4.8% | -$1.31 |
Egghead.com | EGGS | $20.75 | -17.6% | -$4.44 |
eBay | EBAY | $176.88 | -14.7% | -$30.38 |
ETRADE | EGRP | $26.63 | 4.7% | $1.19 |
N2K | NTKI | $14.50 | -12.1% | -$2.00 |
ONSALE | ONSL | $39.75 | -26.7% | -$14.50 |
total | $553.63 | -9.7% | -$59.50 | |
average | $61.51 | -9.7% | -$6.61 | |
Security | ||||
Axent | AXNT | $28.75 | 12.7% | $3.25 |
Checkpoint | CHKPF | $39.63 | 26.0% | $8.19 |
ISS Group | ISSX | $39.13 | 15.9% | $5.38 |
Network Associates | NETA | $53.81 | 5.5% | $2.81 |
Security Dynamics | SDTI | $18.44 | 21.9% | $3.31 |
Verisign | VRSN | $47.00 | 23.3% | $8.88 |
total | $226.75 | 16.3% | $31.81 | |
average | $37.79 | 16.3% | $5.30 | |
Content/hubs | ||||
AOL | AOL | $90.38 | 0.6% | $0.50 |
Broadcast.com | BCST | $54.75 | -12.4% | -$7.75 |
CNET | CNWK | $50.44 | -0.7% | -$0.38 |
Excite | XCIT | $56.63 | 8.9% | $4.63 |
GeoCities | GCTY | $34.38 | 7.4% | $2.38 |
Infoseek | SEEK | $44.88 | 36.8% | $12.06 |
Lycos | LCOS | $57.88 | 0.3% | $0.19 |
Sportsline | SPLN | $17.50 | -2.1% | -$0.38 |
Yahoo | YHOO | $198.50 | -3.8% | -$7.75 |
total | $605.31 | 0.6% | $3.50 | |
average | $67.26 | 0.6% | $0.39 | |
Software | ||||
Netscape | NSCP | $38.75 | 2.6% | $1.00 |
Open Text | OTEXF | $18.50 | 3.5% | $0.63 |
Realnetworks | RNWK | $35.44 | -3.6% | -$1.31 |
S-1 Tech | SONE | $24.00 | 9.7% | $2.13 |
Spyglass | SPYG | $21.25 | -13.3% | -$3.25 |
Vocaltec | VOCLF | $12.31 | 2.1% | $0.25 |
total | $150.25 | -0.4% | -$0.56 | |
average | $25.04 | -0.4% | -$0.09 | |
Enablers | ||||
Broadvision | BVSN | $30.44 | 24.2% | $5.94 |
CKS Group | CKSG | $28.50 | -10.6% | -$3.38 |
CMGI | CMGI | $73.25 | -3.9% | -$3.00 |
CyberCash | CYCH | $14.81 | -7.4% | -$1.19 |
DoubleClick | DCLK | $37.19 | 2.4% | $0.88 |
Network Solutions | NSOL | $75.50 | 18.9% | $12.00 |
Open Market | OMKT | $13.94 | -11.2% | -$1.75 |
24/7 Media | TFSM | $26.00 | -5.5% | -$1.50 |
US Web | USWB | $20.00 | -9.6% | -$2.13 |
total | $319.63 | 1.9% | $5.88 | |
average | $35.51 | 1.9% | $0.65 | |
High-speed/infrastructure | ||||
Broadcom | BRCM | $100.75 | 11.2% | $10.13 |
Inktomi | INKT | $122.13 | -8.5% | -$11.38 |
@Home | ATHM | $63.13 | 6.1% | $3.63 |
Cisco | CSCO | $79.81 | 0.1% | $0.06 |
total | $365.81 | 0.7% | $2.44 | |
average | $91.45 | 0.7% | $0.61 | |
ISPs/Access | ||||
Concentric | CNCX | $25.56 | -7.7% | -$2.13 |
Earthlink | ELNK | $59.50 | -9.8% | -$6.50 |
Exodus | EXDS | $40.00 | 8.5% | $3.13 |
IDT Corp | IDTC | $15.56 | -23.6% | -$4.81 |
Mindspring | MSPG | $68.00 | 8.6% | $5.38 |
PSINet | PSIX | $19.25 | -3.8% | -$0.75 |
Verio | VRIO | $18.13 | 1.4% | $0.25 |
total | $246.00 | -2.2% | -$5.44 | |
average | $35.14 | -2.2% | -$0.78 |
News behind the moves:
fiscal quarter revenue jumps 143% to $133.3 million vs. 1Q98. Net income
after tax reaches $4.9 million or $0.14 EPS vs. $0.08 EPS. Of total
revenue, IDT’s IP telephony unit revenue is $5.3 million, up 212% vs. same
quarter last year, giving IDT reason to consider spinning off its Net2Phone
division it says. IDT claims more than 1 million users of Net2Phone have
used it, racking up 34.6 million minutes in the quarter, up 57% from the
previous quarter.
The odd thing about IDT seems that many telco firms are trying to integrate
IP services, not spin them out. However, on a high-growth 10x revenue
multiple Net2Phone could be valued at $250 million. IDTC market cap now
sits at $471 million. So selling 20% or so to the public may free up some
value here.
U.S. cable services to provide Internet services, agrees to acquire set-top
applications and interactive TV company Full Force Systems. Undisclosed
terms. The buy gives @Home engineering and know-how talent as it seeks to
meld the worlds of Internet with TV in something we dub “Interactive TV,
the sequel, or ITV-II.”
according to buzz from Silicon Valley. If so, we think the deal makes sense
for a larger ISP to leverage PointCast’s technology to provide custom news
and commerce feeds to corporations and consumers — a regulated bandwidth
solution to companies that, ironically, once banned PointCast from its
employees due to bandwidth hogging.
from its $15 IPO price, closing at $48 per share. UBID climbed as high as
$60.25 per share on its 1.58 million offer through Merrill Lynch, UBID
opens at $40 and loses some ground to $34.125 per share in early trading
before closing above its open.
tout from its IPO underwriters led by JPMorgan initiating a “buy” rating.
EarthWeb also signed 45 new ad clients for its site, which produces content
and resources aimed at Internet professionals and Web developers.
“buy” rating from SoundView and $30 per share target. we think Internet
security has been the last bastion of stagnant stock prices all year, the
only sector we think hasn’t ridden the Internet runups.
Perhaps some of it is rightly so: none of the firms in this space are
aggressively consolidating the security market. That’s the opportunity
they’ve all missed, including SDTI. Another reason we think they’ve crawled
along, while e-tail roars none of them have parlayed the security aspect of
commerce into public awareness. The pop in ISDEX for security may be a sign
that they’ve started to arrive on the radar.
Attention Internet Startups! LaunchPad West StartUp
Pavilion, part of Spring Internet World ’99, one of the world’s
largest Internet industry trade shows offers exhibit space for startups
ONLY at a reduced price in order to meet their often limited capital
available at the startup stage. Contact Sean Moriarty (hurry, space
limited): mailto:moriarty@mecklermedia.com
