Like riding the Matterhorn at Disneyland, investing in Internet companies
comes with its own ups and downs, many times with the same firm. Web-based
auction service Onsale (NASDAQ:ONSL) provides perfect anecdotal evidence of
the on-again adrenaline ride Wall Street plays. ONSL tops our list of
gainers since January 13, up 47%.
Long-time let’s wait and see if it ever gets appreciation Internet service
provider PSINet (NASDAQ:PSIX) finally posts some upside, but we wonder if
it meets the height requirement in the all new grab-and-go Internet space?
Especially when its friends have already moved on to the next
attraction–telcos or larger communications wannabes.
Some of the more significant riders on this loop de loop include Earthlink
Network (NASDAQ:ELNK), which begins to find equal footing with its main
rival Mindspring (NASDAQ:MSPG).
The new pecking order: AOL (NYSE:AOL), Yahoo! (NASDAQ:YHOO), Excite
(NASDAQ:XCIT), and Lycos (NASDAQ:LCOS) and then a tie between ELNK and
MSPG. Sure it’s access and access to content. A blurring line. Maybe even
deals to close the gap. Not full-on acquisitions, co-marketing à la
the Yahoo-MCI handshake.
We told you about Sportsline [ISR Nov.
14, 1997] when SPLN was under $10 a share. Now it’s over $23
after the investment banks put out their own ratings this month that echoed
that two-month-old analysis.
Some ISPs have shined, but still on the “Internet leper” stock list is
Concentric (NASDAQ:CNCX), for no reason we can see. It may prove to be a
sleeper about to wake up. If Mindspring and Earthlink go up, why not a
business-centric ISP?
CNCX just placed $150 million units last month, with each
unit consisting of $1,000 in principal amount of its 12-3/4% senior notes
due 2007 and a warrant to purchase 6.34072 shares of CNCX. Can acquisitions
be far behind? Has this been discounted into CNCX yet?
Here’s a look at the stats, sorted by most percentage gains, with 26 of the 35
on the plus side:
Hot & Not Internet Stocks
| ISDEX ® | Ticker | 21-Jan-98 | % change | Point change | % change |
| Internet Stock Index | symbol | close | from | from | from |
| 13-Jan-98 | 13-Jan-98 | 31-Dec-97 | |||
| ISDEX Geometric Average | 110.15 | 10.2% | 10.23 | 10.3% | |
| ISDEX Price Wtd. Composite | 879.00 | 8.7% | 70.38 | 7.7% | |
| NASDAQ | 1,587.92 | 3.0% | 46.29 | 1.1% | |
| DJIA | 7,794.40 | 0.8% | 62.27 | -1.4% | |
| Onsale | ONSL | $ 25.88 | 47% | $8.25 | 44% |
| PSINet | PSIX | $ 8.44 | 42% | $2.50 | 65% |
| Versant Object Technologies | VSNT | $ 7.06 | 38% | $1.94 | -49% |
| USWeb | USWB | $ 13.63 | 32% | $3.31 | 45% |
| Earthlink Network | ELNK | $ 36.88 | 29% | $8.38 | 43% |
| Sportsline USA | SPLN | $ 23.13 | 29% | $5.25 | 115% |
| CNET | CNWK | $ 32.00 | 23% | $6.00 | 8% |
| Mindspring | MSPG | $ 35.88 | 21% | $6.31 | 7% |
| CMG Info | CMGI | $ 36.00 | 20% | $6.06 | 19% |
| Infoseek | SEEK | $ 12.38 | 16% | $1.69 | 15% |
| Forefront | FFGI | $ 9.25 | 16% | $1.25 | 18% |
| Excite | XCIT | $ 38.31 | 15% | $5.13 | 28% |
| Open Market | OMKT | $ 12.13 | 14% | $1.50 | 26% |
| Spyglass | SPYG | $ 6.25 | 14% | $0.75 | 27% |
| VocalTec | VOCLF | $ 22.06 | 12% | $2.31 | 8% |
| Amazon.Com | AMZN | $ 60.88 | 9% | $5.13 | 1% |
| Lycos | LCOS | $ 39.56 | 9% | $3.19 | -4% |
| Mecklermedia | MECK | $ 26.13 | 8% | $2.00 | 5% |
| Concentric | CNCX | $ 10.25 | 8% | $0.75 | 15% |
| America Online | AOL | $ 95.25 | 7% | $6.00 | 5% |
| E*TRADE | EGRP | $ 23.94 | 5% | $1.09 | 4% |
| Open Text | OTEXF | $ 12.00 | 4% | $0.50 | -10% |
| Trusted Information Systems | TISX | $ 10.69 | 4% | $0.44 | 7% |
| Security First Net Bank | SFNB | $ 7.13 | 4% | $0.25 | -2% |
| Security Dynamics | SDTI | $ 38.38 | 2% | $0.75 | 7% |
| CKS Group | CKSG | $ 14.63 | 2% | $0.25 | 4% |
| RealNetworks | RNWK | $ 16.13 | -2% | -$0.25 | 16% |
| Raptor | RAPT | $ 11.88 | -2% | -$0.25 | -10% |
| Yahoo! | YHOO | $ 63.88 | -3% | -$1.91 | -8% |
| @Home Network | ATHM | $ 23.75 | -5% | -$1.19 | -5% |
| N2K | NTKI | $ 22.50 | -5% | -$1.13 | 54% |
| CyberCash | CYCH | $ 10.81 | -6% | -$0.69 | -15% |
| Network Solutions | NSOL | $ 17.00 | -6% | -$1.13 | 30% |
| Netscape | NSCP | $ 17.88 | -6% | -$1.19 | -27% |
| CheckPoint Software | CHKPF | $ 37.13 | -7% | -$2.88 | -9% |
| TOTAL | 879.00 | 8.7% | 70.38 | 7.7% | |
| SIMPLE AVERAGE | 25.11 | 8.7% | 2.01 | 7.7% |
January 21: USWeb (NASDAQ:USWB) reports $10.6 million sales on $19 million
loss for fourth quarter. Full-year results reach $19.3 million sales and
$53.3 million loss. USWeb says this includes an $11.1 million unusual
charge for 4Q
and $29.6 million for full year. We still think it’s early in the turnkey
Web solution game and that USWeb may have a lot longer to go to reach
critical awareness.
Januar 20: AOL (NYSE:AOL) reports its 11 millionth subscriber citing strong
sales of sub-$1,000 PCs, which accounted for 40% of all PC sales this
holiday season, as the driver.
January 16: Sportsline (NASDAQ:SPLN) agrees to acquire GolfWeb for 860,000
shares. The news sends SPLN up to $20.625 per share Friday. It’s timely
that we
discussed Sportsline in the ISR Jan. 14 morning report. Sports are a
no-brainer.
Sportsline combined with the CBS TV reach, stay tuned.
January 15: Excite (NASDAQ:XCIT) tries to set the pace again for “Web
networks” with the $89 million buy for target marketing and ad management
software firm Matchlogic. With $4 million revenue the multiple is north of
22x on a trailing basis. Deal value could exceed $107 million if agreed
upon shares–3.2 million–remains intact.
January 14: Yahoo! (NASDAQ:YHOO) posts year-end revenue of $67.4 million, up
242% vs. 1996. Fourth-quarter revenue hits $25 million, up 181% vs. 4Q96.
Pro forma net income is $2.6 million or $0.05 per share, excluding $3.9
million charges related to the acquisition of Four11, the directory and
e-mail company. With that charge, net loss is $1.3 million $0.03 per share.
Closely held AudioNet raises $22 million from investors including Motorola,
Intel, and Yahoo!, among others. AudioNet produces, appropriately, audio
content for the Internet.
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