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Open Market says 'We're No.1'
Claims a fifth of e-commerce software market
By Brenon Daly, CBS MarketWatch
Last Update: 3:49 PM ET Apr 6, 1999 Software Report
BURLINGTON, Mass. (CBS.MW) -- Shares of Open Market jumped 12 percent on heavy trading Tuesday afternoon after the company said it is the largest seller of software that lets people buy and sell online.
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Updated:
4/6/99 3:02:24 PM ET
In a release, Open Market (OMKT) said it held 20 percent of the e-commerce software market. That put it ahead of rival such as BroadVision (BVSN), IBM (IBM) and Oracle (ORCL), according to numbers from market researcher Dataquest.
The long and the short of it
"The company is in pretty good shape," said Alex Arnold, analyst at H.C. Wainwright in Boston. The release "re-affirms that they are dominating a fairly important space."
He added "short covering" may have also played a role in the stock's rise. About 4.5 million shares of the company's 11 million share float are sold short.
A short sale involves borrowing shares and selling them, hoping to buy them back at a lower price to pocket the profit. Repurchasing the shares is known as "covering" and that buying pressure can push shares higher.
The stock rose 1 11/16 to 13 13/16 on volume that was more than twice as heavy as average. Shares gained as much as 22 percent during the session.
"It's one of the reasonably priced Net stocks," said John Puricelli, analyst at A.G. Edwards in St. Louis. He picked up coverage of Open Market with an "accumulate" rating on March 25.
OMKT
NASD
Last Chg.
14 +1 7/8
% Chg. Vol.
+15.46% 4,100,300
Day Lo. Day Hi.
12 14 13/16
Open Prev.
12 12 1/8
As of
Apr 06/99 4:04 pm ET
Last Trade
Apr 06/99 3:49 pm ET
15 MIN. DELAY
Although the company has great promise, Puricelli noted it still has a "long lead time." He doesn't expect Open Market to turn a profit until 2001.
Options aplenty
There was also some notable option trading for Open Market, with 1,100 contracts of the April 15 calls (OQM DC) changing hands. The contract added 5/16 to 1/2.
Braden Silverman, an options trader at the CBOE, said he didn't read too much into the stock movement Tuesday. The stock has been trading between 10 and 15 for most of the year, he said. "I wouldn't get excited until I see it break above 15."
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