Top 10 Decliners: Tallying The Bloodbath, Bears & Bulls

Fans of the running of the bulls often forget about the kind of damage
those horns can do if they happen to pierce. The trick for Wall Street has
been sprinting ahead of the ivory tips in the foolish belief that the sky
is rising and the legs aren’t tiring. Investors beginning Friday and
yesterday discovered that the horns were for real and the knees were not so
strong,
as ISDEX lost 21% of its value, 15% of that on August 31 alone.

The broader market bellwether Dow dropped more than 500 points in its
second-largest
one-day drop in points ever. The question being raised again and again
is–how far is enough?

Our analysis indicates that all the indices have
wiped out 1998’s gains and then some. ISDEX is more than 12% below where it
began the year.

ISDEX price weighted, which shows prices of new stocks
added from IPO price, was up 25%, however, with the IPOs in the mix.
Overall, the four different indices together were down 2.2% since December
31, 1997.

The top 10 decliners for ISDEX in the bloodletting August 31 are as
follows. In it we add the bullish and bearish comment about the stock, based
on the notion of how easy and quickly investors forget that in July ISDEX
was near an all-time high. There’s a bull lurking in every bear and bear
hiding in every bull.

Excite’s (NASDAQ:XCIT) aggressive buying and, more recently, write-down
accounting got it into the hot seat with investors. Russia just gave them a
reason to walk on the stock. Also, we think stocks that ran on brand and
emotion can also fall on those two elements just as easy.

PSINet (NASDAQ:PSIX) has been the target of takeover rumors for well over
six months now and no suitors in sight. It’s been building a global network
for data and IP communications which we believe bodes well for the future,
in spite of skittishness about international exposure.

Lycos (NASDAQ:LCOS) may emerge as the king of community Web-services with
all the potential revenue and possible earnings flow that it implies. People
are commerce and now Lycos has people with its community sites. The
challenge is converting them to customers or selling them to marketers in a
way that doesn’t make them pack up and go.

Earthlink (NASDAQ:ELNK)
coincidentally is owned in part by one of super-investor George Soros’
funds. Soros was famous for making $1 billion by shorting the pound in the
1980s. Now he may be more famous for investing $2 billion in Russia before
it collapsed.

Perhaps the most speculative of the top 10 decliners is @Home
(NASDAQ:ATHM), full of the promise of high-speed Internet services via
cable but not available on the scale of an AOL coast-to-coast or globally.
Highspeed Internet access rules, but sign-ups need to be stronger in our
opinion–@Home serves about 150,000 cable modem subscribers in North
America out of 8 million homes passed.

We expect the bulls and bears
debate to continue as the market tries to find its red cape. For now, all it
sees is just plain old red from the bloodletting of the past two trading
sessions.