Wind Shears Whip Internet Stocks

Internet stocks in recent days have been hit by the market equivalent of
wind shears, as increasing bullishness about ‘Net stocks has clashed
with investors’ urge to take profits and re-tool their portfolios.

It has made for a rough ride of late, with ‘Net stocks soaring one day and plummeting the next, and sometimes doing both within the same
trading session.

In general, the larger Internet stocks have handled the turbulence
better than either smaller ‘Net craft or other high-tech offerings.
Since Dec. 8, internet.com’s Internet Stock Index – which includes
numerous ‘Net firms with multibillion-dollar market capitalizations –
has risen 3.6 percent.

In contrast, figures from internet.com’s latest weekly Internet
StockTracker newsletter, which tracks the performance of slightly more
than 300 ‘Net tickers, shows the vast majority down since Dec. 8. And
the tech-heavy Nasdaq has slipped 4.7 percent.

Even some e-commerce IPOs have seen their aftermarket flights shortened
by the choppy weather. Preview Systems (PRVW),
which sells products designed to allow companies to securely distribute
and license digital property, soared in its Dec. 8 debut, finishing at
83-3/4, or 299 percent above its $21 per share offer price. By Wednesday, just a
week later, shares of PRVW dipped below 50.

Inventory management software provider Retek (RETK)
zoomed off the launch pad on Nov. 18, more than doubling its IPO offer
price of $15 per share to close at 32 9/16. It continued up, climbing as
high as 87 on Dec. 8 (there’s that date again). On Friday afternoon it
was trading at 63-1/2.

Until further notice, investors are advised to keep their seat belts
buckled.


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