Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Non-Tech : Tulipomania Blowoff Contest: Why and When will it end? -- Ignore unavailable to you. Want to Upgrade?

To: Steve Misic who wrote (772)	1/20/1999 5:57:00 PM
From: Sir Auric Goldfinger	Read Replies (1) \| Respond to of 3543

Internet Companies Slump on Concern About Earnings (Correct) 1/20/99 17:40 (Corrects Horen's rating on Onsale, not Broadcast.com.) Seattle, Jan. 20 (Bloomberg) -- Shares of Internet companies slumped, lead by a 19 percent decline in No. 1 online bookseller Amazon.com Inc., amid concern earnings and profit margins may fall short of expectations. Amazon.com fell 26 13/16 to 113 on trading of 15.2 million, it's biggest drop in five months. Broadcast.com fell 17 3/8 to 120, while Onsale fell 4 1/8 to 46 1/8. Marketwatch.com tumbled 23 7/8 to 72 1/2. Investors and analysts have become more wary about the surge in Internet companies' shares and their inability to offer profit that corresponds to their high-flying valuations. Onsale, an Internet retailer, said it will sell computer products at wholesale prices, which raised concerns about other Internet retailer's ability to maintain their prices and maintain profitability. ''It was broad concern about the implications of gross margins of the Onsale announcement'' that pushed Internet shares down, said Dalton Chandler, an analyst at Needham & Co., who rates Amazon.com ''hold.'' Onsale said this week its fourth-quarter revenue was reduced by declining sales of computer products and warned that it would take longer to reach profitability than expected. Onsale warned its fourth-quarter results would be lower than analysts' expected. It will release its results Feb. 10. ''They missed the quarter and they pushed break-even from the third quarter of 1999 to the third quarter of calendar 2000,'' said Steve Horen, an analyst at NationsBanc Montgomery Securities Inc. in San Francisco, who lowered his rating on Onsale to ''hold.'' Onsale also said it will offer products at wholesale prices through a new program called Onsale atCost. Companies and consumers will be allowed to purchase computers and other computer-related products at wholesale prices for a fee. Some investors and analysts are concerned that this type of pricing will hurt other companies' gross margins. Broadcast.com, which transmits audio and video programming on the Internet, saw its shares hit a record of 285 1/16 last week. It declined 57 percent since then amid concern that the Dallas-based company's earnings won't exceed expectations. ''The run-up in the stock may have led some investors to infer inflated earnings for the December quarter,'' said Philip Leigh, an analyst at Raymond James & Associate Inc. in St. Petersburg, Florida, who rates the stock ''accumulate.'' Broadcast.com is scheduled to release its fourth-quarter earnings Jan. 28. Other slumping Internet companies include Excite Inc., which fell 13 3/8 to 96 5/8, and At Home Corp., which dropped 5 5/8 to 109 3/4. Yesterday At Home, which offers high-speed Internet access over cable-television lines, said it would buy No. 2 Internet search service Excite for $7.5 billion. Yahoo! Inc. fell 35 13/16 to 287 3/16. America Online Inc. fell 2 to 148 1/2. Lycos Inc. fell 8 1/8 to 104 13/16 and Infoseek Corp. fell 10 1/2 to 66 9/16. --Mylene Mangalindan in the San Francisco newsroom (415) 912-2991 through the Princeton newsroom (609) 279-4000/dl/pkc