Food for thought from earlier today:
FOCUS-Internet stocks surge again on holiday "e-tailing"
(Previous New York, recasts, adds more analyst comments)
By Therese Poletti
SAN FRANCISCO, Dec 28 (Reuters) - Internet-related stocks continued to surge Monday as more anecdotal data confirmed investor expectations that many Internet-based retailers would be successful this holiday shopping season.
On Monday, the Boston Consulting Group released a study of online sales during the Christmas shopping season. The results showed that year-over-year revenues grew 230 percent in its survey of online retailers selling apparel, books and music, home and garden products, specialty foods and electronics.
''This holiday season marks the year that online retailing moved from an interesting consumer experiment to an accepted retail alternative,'' said David Pecaut, a senior vice president at the Boston Consulting Group.
The study also projected that online retail revenues will reach over $13 billion in 1998.
''The world is changing,'' said Charles Pradilla, chief investment strategist at SG Cowen. ''Everything that is transacted will change.''
Pradilla also wrote in a report last week that the movie ''You've Got Mail'' is more than just light entertainment, calling it a ''cultural watershed for the Internet.''
Pradilla said the movie, about two New Yorkers who meet in an America Online chat room and eventually fall in love, could result in many new users logging onto the Internet.
As the big name Internet stocks, such as Amazon.com, America Online and Yahoo! each reached new highs Monday, some investors looked for some lesser-known Internet plays.
New additions to the Internet frenzy included SkyMall Inc.(Nasdaq:SKYM - news), a catalog company that caters to airline passengers, but does a small part of its sales on the Internet, and Active Apparel Group Inc. (Nasdaq:AAGP - news), a sportswear company whose shares soared nearly 600 percent after a Web site debut.
Shares of the Phoenix-based SkyMall closed up $23 at $35.5625 a gain of more than 180 percent and it was the most active stock on the NASDAQ, with over 23 million shares trading.
SkyMall said early Monday that its 1998 Internet sales rose some 600 percent from last year, to $2.1 million, which is only three percent of its expected overall sales of $65 million.
Active Apparel of New York rocketed to $8.50, a gain of $7.25, or 580 percent, after the sportswear designer and marketer announced the debut of a Web retail site for its Everlast clothing label and a deal for the site to be linked to another Web site, Fashionmall.com.
The surge in Active Apparel follows a jump in another apparel company, Delia's Inc. (Nasdaq:DLIA - news), which soared last week on news that the New York-based teen clothing retailer opened an online store on Yahoo! Inc.'s new Yahoo! Shopping service.
''There is a big halo effect at play here,'' said Lauren Cooks Levitan, a BancBoston Robertson Stephens analyst. ''Investors need to be selective in choosing brands that really do have meaning, it's not just what you do to drive people to your site. It's what you are able to do on an ongoing basis. Investors should be careful.''
Big, well-known brands, such as Amazon.com Inc. (Nasdaq:AMZN - news) again showed strength, with shares of the pioneering Internet retailer of books, videos and music surging $27.1875 to a new 52-week high of $352. The gains extended a run for Internet retailers that lifted the group ahead of Christmas.
America Online, the world's largest online service, jumped $20.5625 to $157.25 in heavy volume on the NYSE, giving AOL a higher market capitalization than Walt Disney Co. (NYSE:DIS - news).
Yahoo! rose another $28.375 to $275.50, both reaching new 52-week highs. Netscape Communications Corp. (Nasdaq:NSCP - news), which has agreed to a merger with AOL, soared $9.50 to $68.1875, also reaching a new 52-week high.
Online investment firms also staged fierce rallies, with E*Trade Group Inc. (Nasdaq:EGRP - news) up $11.75 to $56.75. The online broker said its financial services Web site, Destination E*Trade, had pulled in more than 500,000 members since its September launch.
Charles Schwab Corp. (NYSE:SCH - news), another Internet brokerage powerhouse, gained $6.69 to $67.06, a rise that analysts linked to the rally in E*trade.
''If we get a correction, these things will be creamed,'' said Pradilla of SG Cowen.
''This is clearly very speculative around the edges... Investors have to realize this is a very speculative area...But we are not saying avoid them by any means.''
Pradilla cautions investors to research the Internet stocks they want to invest in and to maintain a balanced portfolio.
biz.yahoo.com
Regards, Jeff
|
