DANG! I had thought to buy Terra back by delving into a profit-taking dip today -- but where is the dip?
Today's news:
MADRID, Jan 18 (Reuters) - Internet services company Terra Networks <TRR.MC> <TRRA.O> stock soared to yet another record high on Tuesday, smashing the 100 euro mark amid what traders described as almost hysterical demand.
Its market capitalisation is now greater than Amazon.com <AMZN.O> and around a third of Yahoo! Inc <YHOO.O>.
The shares reached 116.90 euros shortly after Spanish stock market authorities widened trading limits for the second day in a row, then slipped back to 108.85 euros at 1157 GMT, a gain of around 10.95
percent on the day and eight times its IPO price two months ago.
The shares began their latest surge after Spanish stock exchange authorities said last Friday that Terra would enter the main Ibex-35 index. Telecoms group Telefonica <TEF.MC>, which holds nearly 70
percent of Terra, was up 1.7 percent at 27.09 euros Tuesday morning, having earlier hit a new life high of 27.78 euros.
Analysts said Terra's strong presence in the huge but underdeveloped Internet markets of Latin America made it stand out in the still small European Net sector.
But its explosive growth was also partly explained by the fact only 15 percent of its stock was traded publicly.
And with Terra so closely held, investors have been casting around for other stock with Internet potential, sending the value of some of Spain's smaller stocks through the roof.
"We have the passed the 'anything-goes' limit and that's dangerous," Jesus Sanchez Quinones, director general of Spanish brokerage Renta 4. "Any company with a dot-com is doubling in value
which looks a little exaggerated."
He said it would make sense for Terra to take advantage of its sky-high price to acquire other Internet assets using its shares as currency.
Its market capitalisation of nearly 30 billion euros ($30.26 billion) makes it Spain's third most valuable company behind only Telefonica and bank Banco Santander Central Hispano <SCH.MC>.
Traders said they were worried the market might be setting itself up for a huge fall by banking on a company which says it will not make a profit until 2002. But they added they could not afford to stay
off the Internet bandwagon.
"You can't square up to the market like a fool. You have to join in the whole thing," said a fund manager who asked not to be named.
Engineering group Abengoa <ABG.MC> was up 50 percent thanks to its holdings in Telefonica, Terra and other telecoms and Internet companies which it said it was grouping into a holding.
And tiny office supplies company Grupo Picking Pack (GPP) <GPP.MC> soared around 70 percent, a day after announcing it bought an eight-percent stake in U.S. Internet data management company
Blue Line On Line for $11 million.
($1=.9914 Euro) By William Schomberg |
