Summer’s Aftermarket Stars Still Shine

Internet stocks hit some heavy turbulence this summer, particularly in
late July and early August. A look at internet.com’s Internet Stock
Index shows that from July 1 through Tuesday’s trading, the ISDEX was
down 11.1 percent.

Also suffering through the recent season of interest rate fears and
earnings anxiety were Internet IPOs, a great number of which fizzled on
the launch pad. Indeed, the average first-day performance of Internet
IPOs in August was the lowest of any month this year.

No wonder, then, that some pundits and analysts have declared that the
Internet IPO “bubble” has burst.

Thus it may come as a surprise that 60 percent of Internet stocks which hit the
market in July and August are now trading above their respective
first-day closing prices, according to the latest figures from
internet.com’s IPODEX.

Here are the 10 biggest gainers in the IPODEX’s current group of 60
Internet companies, measured from the date of their IPOs through
Tuesday’s trading:

One thing that strikes me right away is the wide range of business
models offered by the Net players listed above.

Runaway leader Internet Capital Group, while a CMGI-like holding
company, really represents an investment in business-to-business
e-commerce, for that is the exclusive focus of its portfolio.

After
cooling off briefly early this month, ICGE is up nearly 50 percent since Sept.
10, trading Wednesday afternoon at $97.25.

HotJobs.com, on the other hand, is a content play. Though ranked second
in the current IPODEX, the online employment site has fallen 26 percent since
its $34.94 close on Sept. 7.

Braun Consulting is a services provider, helping companies design
customer and supply-chain systems. Like ICGE, Braun caught a second wind
this month, rising more than 40 percent in the past week alone. It was trading
Wednesday at $17.25.

Other big gainers in the IPODEX include an Asian ISP (Internet
Initiative Japan), an e-commerce software vendor (InterWorld), a network
of Web-based real estate listings (Homestore.com), a maker of Linux
operating system software (Red Hat), two telephony software and service
providers (Net2Phone and Clarent) and another Internet consulting
services company (U.S. Interactive).

While there definitely is an e-commerce flavor to this collection of hot
Internet stocks, it is clear that investors continue to see strong
opportunities in a broad cross-section of Net-related markets.

Tomorrow we’ll look at the bottom-feeders in the IPODEX.

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