Glenn, right now I'm into fuel cells and alternative energy stocks.
In just a couple of weeks my Mcel and Hpow IPO's are double and triple baggers already, while Amzn sits dead.
I do have Amzn 30 Jan calls and that's because of the Xmas rush...that's all.
Oh! I did buy some eTys a couple of weeks ago. They'll be sold after the Xmas rush. Trust me.
>Needham, Massachusetts, Sept. 16 (Bloomberg) -- David Blohm, president and chief executive of SmarterKids.com Inc., watched his company's shares rise 74 percent in the past four weeks, regaining a bit of the ground lost earlier this year.
The reason for the stock's recent increase? Blohm said it may be that some investors are counting on a holiday surge in online spending to give a lift to the fortunes of Internet retailers.
``In the summer, the stocks are always in the dog house and as you get into Christmas people start to notice,'' said Blohm.
SmarterKids.com, a site that offers educational toys and resources, tumbled 85 percent between New Year's Day and Aug. 21, when its shares scraped bottom at 1.03 each. The shares closed at 1.84 yesterday.
Holiday shopping in the U.S. and Canada is expected to rise 70 percent to $10.7 billion this year from $6.31 billion last year, according to the Gartner Group Inc., a technology research firm.
Worldwide sales during the fourth quarter are expected to jump 85 percent to $19.5 billion from $10.5 billion last year, Gartner said.
``Investors and the media are realizing, `Gee, maybe we've missed the boat,''' said analyst Thomas Wyman of J.P. Morgan Securities Inc. ``It's not all crash and burn.''
Not Alone
SmarterKids.com isn't alone in attracting investors' attention in recent weeks. Internet retail stocks, described in July as ``nuclear waste'' by Robert Burgoyne, chief technology strategist at Monument Funds Group, are showing signs of a post- meltdown recovery.
The Bloomberg U.S. Electronic Commerce Index of 11 stocks plunged 55 percent to a 52-week low of 52.70 on July 31 on investor concerns that many Web retailers would run out of cash before they reached profitability. Since then, the index has gained 26 percent.
Amazon.com Inc., the largest online store and a bellwether of Internet retail shares, has gained 45 percent since the end of July. EBay Inc., the world's largest Web auctioneer, has climbed 35 percent during the same period.
Behind the stock gains is the steady increase in online shopping. Shoppers at the top 20 online retail sites in August almost doubled to 6.4 million from 3.3 million a year earlier, said analyst Cameron Meierhoefer of PC Data Online, an Internet research firm.
Amazon.com led all online stores with an estimated 1.6 million buyers during August. It was followed by Ticketmaster Online-City Search Inc., Buy.com Inc., Bertelsmann AG's CDNow Inc. unit and Sears, Roebuck & Co.'s Sears.com in the top five.
Less Competition
Internet retailers may also be getting a lift from investors who recognize that some Web companies face less competition, analysts said, after rivals either ran out of money or were sold. Those companies still in business have cut costs and are more focused on turning a profit, said analyst Anthony Noto of Goldman, Sachs & Co.
There also has been some buying by investors who held short positions in the stocks, Noto said. Short sellers borrow a company's shares, usually from a broker, and sell them, expecting the shares to decline. To lock in their profits, these investors must buy back shares for return to the lender.
The retailing cycle may also play a role in the recent rise of Internet merchants, many of which reached 52-week highs in last year's fourth quarter. Amazon.com, for example, traded as high as 113 on Dec. 9, and Ashford.com, an online merchant of luxury goods, reached 35 on Nov. 26.
Web retailers ``always go up in (the fourth quarter), at least in the last two years, which in Internet time is always,'' said analyst John Spytek of Banc One Investment Advisors, which owns shares in EToys Inc., an Internet toy store.
Bottom Fishing
Investors also may be willing to make bets on stocks that have fallen to less than $5 a share, making them a cheap way to gamble on a holiday rebound for the industry.
EToys, for example, traded at a low of 3.88 on Aug. 10, a drop of more than 90 percent from its high of 86 on Oct. 11. It closed yesterday at 5.91.
Other Web stores reaching one-year lows in August included Cyberian Outpost Inc., Buy.com Inc., Egghead.com Inc., Fogdog Inc. and Pets.com. As of Aug. 31 all of those stocks had risen.
``The whole Internet retail sector has stopped falling,'' said analyst Sasha Kostadinov of McDonald Investments Inc.
Of course, many investor still are skeptical that Web retailers can overcome their shortcomings. The industry may be vulnerable to this year's rise in gasoline prices and the threat of slower consumer spending after six interest-rate increases by the Federal Reserve since June 1999.
There also is concern that some companies may have well- publicized problems during the season. BizRate.com, a closely held company measuring buyer satisfaction on the Web, said one in four online orders last year were delivered late.
It almost is inevitable that some companies will have trouble filling orders on time, said Chuck Davis, BizRate.com president and chief executive.
``Some companies were inundated with traffic because they focused on marketing and not on building the site and fulfillment,'' he said.
While investing in online retailers is a risky prospect, investors who make the right choices may get more than a holiday gift, said Banc One's Spytek.
``The worst is over,'' he said. ``Now you're going forward and taking chances on hopefully quality companies.'' |
