The Motley Fool's Market Movers (Heroes)
The Motley Fool - July 06, 1998 18:34
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July 6, 1998/FOOLWIRE/ -- The announcement of a two-for-one
stock split by Internet content aggregator and portal company Lycos Inc.
(Nasdaq: LCOS) sparked a trading frenzy in several Internet-related stocks,
sending their share prices skyward like a July 4th fireworks display. Lycos
rose $20 1/2 to $99 9/16, Excite (Nasdaq: XCIT) picked up $8 1/16 to $107,
Yahoo! (Nasdaq: YHOO) tacked on $26 3/8 to $199 1/4, NetGravity (Nasdaq: NETG) gained $7 7/8 to $27, USWeb Corp.
(Nasdaq: USWB) moved up $4 1/8 to
$29 1/4, and Amazon.com (Nasdaq: AMZN) marched ahead $15 1/2 to $139 1/2.
Wall Street goo-roos gave various explanations for the continuing run-up,
including short squeezes, too many retail brokerage houses chasing a limited
supply of shares, and merger speculation following the recent investments in
CNET Inc. (Nasdaq: CNWK) and Infoseek (Nasdaq: SEEK) by General Electric's
(NYSE: GE) NBC unit and Walt Disney Co. (NYSE: DIS), respectively.
Regardless of what is causing the rally, valuing the companies is becoming
more challenging in the eyes of some analysts.
Zapata Corp. (NYSE: ZAP) surged $11 5/8 to $21 1/2 after saying it will
split into two publicly traded companies. The new Zapata Corp. will include
the company's marine protein and food packaging businesses, while ZAP Corp.
will operate the firm's Internet operations. In connection with the split,
ZAP will acquire or invest in 21 Internet content and e-commerce sites and
bundle them together in a "portal." (Sadly, The Motley Fool was left off the
wish list) The move follows a failed $72 per share bid for portal company
Excite (Nasdaq: XCIT) on May 21, which was widely dismissed as a publicity
stunt. Interestingly, Zapata's plan to produce the actual content on its
portal site runs counter to Excite's strategy. In a recent interview, Excite
co-founder Joe Kraus emphasized the company's role as a content distributor,
rather than as a content provider.
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