There’s a new Internet gold rush, only this time it involves good old-fashioned phone service.
Voice over Internet Protocol, or VoIP, has been one of the hottest investment themes on Wall Street this year. At least until today, when the New York Post questioned the valuation of 8×8 , which until today was up 4,300% this year on its VoIP ambitions.
8×8’s stock lost 20% today, as the Post suggested that cable and phone companies may be better positioned to win the Internet telephony battle.
That concern doesn’t appear to be restraining new entrants, however. theglobe.com is the latest company with VoIP ambitions, according to today’s Wall Street Journal. Once the hottest IPO of all time, TGLO is now a lowly Bulletin Board stock.
Apparently the lesson from the first Internet gold rush may already have been forgotten: when the basis of competition becomes price, only the very strongest survive.
Stocks soared Monday on stronger than expected holiday sales and manufacturing and construction reports.
The Nasdaq surged 29 to 1989, the S&P 500 rose 11 to 1070, and the Dow climbed 116 to 9899. Volume was 1.35 billion shares on the NYSE, and 1.84 billion on the Nasdaq. Advancers led 24-8 on the NYSE, and 21-11 on the Nasdaq. Upside volume was 80% on the NYSE, and 72% on the Nasdaq. New highs-new lows were 628-7 on the NYSE, and 466-10 on the Nasdaq.
After the close, McData lost 5% on a warning.
During the day, Oracle rose 4% on an upgrade. JMP Securities said it expects Oracle to post a solid quarter when it reports results on Dec. 15.
Surprisingly, chip stocks finished up only 0.6% despite a Semiconductor Industry Association report that said chip sales are the strongest they’ve been in 13 years. Applied Materials and Novellus
finished down on the day. Analyst firm ThinkEquity said the report may have been the peak in the sector’s growth rate, and added that pricing pressures remain.
Aether gained 6% on takeover rumors.
United Online climbed 5% on an upgrade.
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