Run-Up in Linux Concerns Reprises Frenzy in Net Issues
By SUSAN PULLIAM
Staff Reporter of THE WALL STREET JOURNAL
Another week, another bubble.
This week's feeding frenzy among Internet day traders has developed around stocks associated with Linux, the computer operating system that was developed by computer hackers and which many technology experts believe could eventually pose a challenge to Microsoft's Windows.
Tuesday, some of the air was let out of the bubble, with nearly all of the Linux stocks -- including Applix, Corel and Ariel -- giving back some of their gains from the run-up, which began on Friday and accelerated on Monday. Applix, which stood at around 8 before its recent run-up, closed at 14 11/16, down 3 15/16, or 21%. Corel, which traded at around 4 last week, closed at 5 3/4, down 5/8, or 9.8%. And Ariel, which was at about 2 before its big rise, closed at 4 7/16, down 2 1/8, or 32%. Applix and Corel had finished Monday among the day's top-10 winners, with gains of 12.8% and 13.3%, respectively.
The run-up in Linux stocks provides the latest example of the powerful explosion that can happen in a group of stocks when Internet chat rooms embrace an idea. It also, undoubtedly, has left some investors wondering what hit them. Almost as abruptly as they began talking up Linux stocks, Internet chat rooms dropped the stocks like a hot potato. That has left some day traders -- those investors who rapidly hop in and out of stocks, sometimes within minutes -- wondering whether the stocks are headed back to their pre-frenzy levels.
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interactive.wsj.com
- Jeff |
