Tax selling due for AOL?
cbs.marketwatch.com
Net stocks keep going up, up, up
By Emily Church, CBS MarketWatch
Last Update: 4:29 PM ET Jan 4, 1999 Also: Internet Daily
NEW YORK (CBS.MW) -- Most Internet stocks tracked the broader market higher Monday although bellwether America Online gave up nearly 4 percent in what one analyst said may signal the first wave of selling for tax reasons.
The Goldman Sachs Internet Index slipped 0.65 percent while the Amex Internet Index rose 1.4 percent, boosted in part by gains in Internet Service Provider Earthlink (ELNK), marketer, Net investor CMGI Inc. (CMGI) and Yahoo! (YHOO), which climbed 11 1/16 to 248.
Stocks ended higher on the heels of a so-far successful launch of the euro. See Market Snapshot. In general, some economists say a strong European-wide currency will benefit both the U.S. and Europe, which is good news for stocks.
Tax selling due?
Yet, despite the solid gains for equities Monday, some technology analysts are expecting investors to think about selling some of their high-flying Internet stocks for tax reasons.
AOL's (AOL) slide Monday may be a partly a result of initial tax-related selling, said Gregory Nie of Everen Securities. The company's stock notched a 552 percent gain last year, and some investors are expected to push those capital gains onto their 1999 taxes.
"There's a couple of wrinkles out there for AOL: they moved up sharply on being included in the S&P 500 and it's a big winner, so this could be the first sign of tax selling" for the Internet stocks, Nie said.
Among 1998's biggest percentage winners were Amazon.com's (AMZN) stock, which rose 966 percent. Other winning stocks for the year include Yahoo! up 606 percent, eBay (EBAY) up 434 percent, Infoseek (SEEK) up 365 percent, Excite (XCIT) up 198 percent, Lycos (LCOS) up 158 percent, Onsale (ONSL) up 144 percent and CNET (CNWK) up 73 percent, according to BancBoston Robertson Stephens analyst Keith Benjamin.
AOL was down 6 1/8 to 149 in heavy volume. The stock moved sharply higher at the close Thursday on a huge buy order.
AOL may also have taken a second hit at midday on reports from Intuit's CEO. The Dow Jones wires reported that CEO William Harris believes Microsoft (MSFT) is gaining more control over Internet access, or gateways. Harris testified in the Microsoft antitrust trial Monday; he made similar comments last week, according to Reuters.
AOL on Monday said its members spent over $1 billion with its network of online retailers during the holidays. Nie said he felt investors had already priced in e-tailing spending.
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