Net stocks move to higher ground
By Bambi Francisco, CBS.MarketWatch.com
Last Update: 5:03 PM ET Aug 17, 2000
NewsWatch
Latest headlines
NEW YORK (CBS.MW) -- After an early-morning struggle, Internet
stocks moved to higher ground, extending their climb to a fourth day, with
shares of EBay, Evoke and optical networking companies in leading
positions.
The Goldman Sachs
Internet Index
($GIN: news, msgs)
edged up 1.3
percent. That Net
barometer has
gained 4 percent in
the past three
sessions. The Amex
Internet Index ($IIX:
news, msgs) added 1.8 percent. Merrill Lynch Internet Holdrs (HHH:
news, msgs) increased by 1 percent.
EBay (EBAY: news, msgs) ran up 5 9/16, or 10 percent, to stay firmly
planted above 60 at 63 1/16 as 7.3 million shares changed hands. EBay
traded at 48 1/2 as recently as last Friday. Investors have been bidding up
shares on optimism that the online auction company's ability to become a
global trading platform has been underestimated.
EBay as world beater
"EBay's primary competitor in Europe, QXL,
recently reported financial results that were below
expectations, and this suggests that EBay can be
the dominant player in Europe," said Greg
Konezny, an analyst at U.S. Bancorp Piper
Jaffray.
"If they can establish the same success in Europe as they had in the U.S.
and create the leading single global platform, it's not [such] a reach to say
that EBay can extend that into Japan and other parts of the world."
Also helping to fuel the enthusiasm was a just-released report suggesting
that e-commerce activity is alive and well. E-tail appears to be off to a
good start in the third quarter. According to Konezny, online purchases in
July were up15 percent from the previous month.
Demand for voice
Net newbie Evoke (EVOK: news, msgs) rose 3/16, or 4 percent, to 5
5/16 after Lycos said it would partner with the recently public provider of
Web conferencing and voice chat services. Evoke went public last month
at $8, raising $56 million.
Salomon Smith Barney, the IPO's lead manager,
originally hoped to raise $90 million. Separately,
Lycos said it was teaming with wireless Internet
infrastructure company Mobilee to develop Lycos'
voice portal. The portal is to provide telephone
users with free access to Lycos content via a local
access number. Lycos stayed firmly above 60,
rising 2 percent to 62 in recent trading.
And one of the most popular Net-enabled mobile
services may one day be a reality in the United
States. Japanese mobile-phone giant NTT
DoCoMo is in talks to acquire a minority stake in
what could become the second-largest wireless
company in the United States, which is being
formed by SBC Communications and BellSouth,
media reports indicated Thursday. See recent
Renegade dispatch.
NTT DoCoMo provides the popular I-mode
service, an Internet access service that has amassed
about 10 million subscribers paying roughly $25
per month for Internet access via mobile devices.
Demand for speed
Shares of ONI Systems (ONIS: news, msgs) continued to distance
themselves from a June IPO price of $25. The stock shot up 13 7/16, or
14 percent, to 108 15/16 after the company said it's won a multiyear
contract with Qwest Communications for optical networking equipment to
support high-speed, local broadband connectivity to customers in major
markets. Essentially, ONI Systems' technology alleviates data traffic jams
in regional networks.
Shares of other fiber-optic related companies ran up as well.
Exfo Electro-optical Engineering (EXFO: news, msgs), which went public
in late June at $26 per share, gained 6, or 11 percent, to 60 1/2;
Sycamore Networks (SCMR: news, msgs) rose 12 1/4, or 8 percent, to
161 1/8.
After going public in May at an IPO price of $20 per share, New Focus
(NUFO: news, msgs) ran up 6 9/16, or 5.5 percent, to 125 9/16; Ciena
(CIEN: news, msgs) surged 15 15/16, or 10 percent, to 179 3/16 on
solid quarterly results.
Box vs. platform
Investors warming up to shares of CacheFlow Thursday were cooling on
Inktomi after CacheFlow reported that its caching product is gaining
traction. Shares of Inktomi (INKT: news, msgs) fell 1 13/16, or 1.7
percent, to 104 1/2, while CacheFlow gained 7 15/16, or 8.5 percent, to
101 3/16.
Late Wednesday, CacheFlow reported fiscal-first-quarter results that
beat analysts' expectations. The company said it generated revenue of
$22.4 million, up 75 percent sequentially. "We're moving aggressively to
challenge Inktomi," said CacheFlow's chief executive, Brian NeSmith,
admitting that Inktomi was the market leader in the caching industry.
A year ago, CacheFlow was behind Inktomi in offering a product that had
the flexibility of software but the robustness of an operating system.
"We've caught up," boasted NeSmith. See full story.
Of note ...
Kana Communications (KANA: news, msgs) rose 1 3/4, or 5 percent, to
39 3/4. Shares began the week at 32 before the provider of e-mail and
customer relationship management software announced major deals with
Cisco Systems and IBM.
Earlier this week, it was announced that Cisco would use Kana's
enterprise relationship management products. On Wednesday, Kana said
it had inked a deal with IBM. The value of that relationship could be north
of $1 billion over a four-year period, according to CS First Boston.
ExciteAtHome (ATHM: news, msgs) rose 7/8, or 6.5 percent, to 14 7/16
after the high-speed Net access and portal operator announced that a
lawsuit entangling Cablevision, itself and its cable partners AT&T, Cox
Communications and Comcast has been resolved.
The parties agreed to dismiss Cablevision's claims against ExciteAtHome
and its partners. |
