Security Matters: ISDEX Breakout Shows Top Gainers

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:


  • 98.12.01 – IDT (NASDAQ:IDTC) reports its first
    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.


  • 98.12.02 – @Home (NASDAQ:ATHM), which owns a lockhold on most of the
    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.”


  • 98.12.03 – PointCast may be close to selling to an Internet backbone
    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.


  • 98.12.04 – uBid (NASDAQ:UBID), a Web auction service, jumps 220%
    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.


  • 98.12.07 – EarthWeb (NASDAQ:EWBX) shares soar 58% today to $52 on a
    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.


  • 98.12.08 – Security Dynamics (NASDAQ:SDTI) finds some legs after a
    “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:[email protected]

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