~OT~ Some Insights on the Internuts....
<<Investors, analysts begin souring on the Internet
By Andrea Orr
PALO ALTO, Calif., May 24 (Reuters) - Internet stocks dropped on Monday amid growing signs that even some of the most diehard investors were beginning to lose faith in the highly volatile sector.
A long list of stocks from Yahoo Inc.(Nasdaq:YHOO - news) to Excite Inc.(Nasdaq:XCIT - news) and eBay Inc. (Nasdaq:EBAY - news) posted double-digit declines, adding to a weak trend that has recently sent some shares $100 off their all-time highs and others to less than a third of recent peak prices.
In view of the sustained selling, a growing number of analysts were sounding skeptical over the prospects for a rebound. Unlike past downturns that have been dismissed as normal corrections following steep gains, more analysts and fund managers were questioning whether the honeymoon was over and the infamous bubble had finally burst.
''I think we'll see a 30 percent to 50 percent correction across the board in these stocks over the next few months,'' said Rick Berry, director of equity research at J.P. Turner in Atlanta. ''No one can predict exactly when, but suffice it to say that people will be selling with reckless abandon.''
''It's over,'' said Michael Murphy, editor of the Overpriced Stock Service, and manager of the Murphy New World Technology Fund, who said he started aggressively taking short positions in several shares two to three months ago.
Not everyone was so bearish. Ryan Jacob, a portfolio manager with the Internet Fund in New York, said the weakness could be partly explained by worries in the overall market over the possibility of higher interest rates.
As much as it was specific to the Internet sector, he said, the selling pressure was part of a normal pattern seen every quarter in which investors bought Internet stocks ahead of the earnings reporting season, only to take profits after the earnings came out, regardless how strong the numbers were.
Others said it was not yet clear whether this quarterly pattern would follow through with another uptick in June before second-quarter earnings reports.
Besides emotional factors, which have weighed heavily in Internet investing, analysts were increasingly citing some technical and fundamental trends that were less than bullish.
For one, the supply/demand balance for Internet stocks is not what it once was. Bob Walberg of briefing.com points out that there have been 45 new Internet issues to begin trading so far this year, with another 60 scheduled to go public before the end of the year, and other companies were putting more shares on the market through secondary offerings.
With this number of Internet stocks, he noted, it would be harder to sustain the fierce demand seen earlier in the year.
The same can be said for the traffic flowing to each individual Web business or portal, which is bound to be diluted as more players appear.
Traffic data reported last week by Media Metrix provided a sobering reminder that the go-go growth rates seen recently could not go on forever. The research firm reported that a number of top Web networks like Lycos Inc.(Nasdaq:LCOS - news), Excite and the Walt Disney Co. (NYSE:DIS - news) and Infoseek Corp. (Nasdaq:SEEK - news)-backed Go Network all lost visitors between March and April.
''It may be a sign that growth of new users is starting to slow,'' said another analysts who asked not to be named.
While Murphy continued to see promise for many of the ''business-to-business'' Internet companies like Inktomi that provides search technology, he said investors were losing patience with those like Amazon.com(Nasdaq:AMZN - news), which have more than once pushed back target dates for turning profitable.
''Amazon.com should change its name to Amazon.org,'' he said. ''It's like a non-profit organization.''
Among the big losers Monday were Internet incubator CMGI Inc.(Nasdaq:CMGI - news), which fell $20.69 to $211.06, Excite down $14.875 to $118.06, and Yahoo down $13.44 to $137.875. Amazon.com fell $11.06 to $117.50, Inktomi lost $10.69 to $103.31, Etoys Inc. (Nasdaq:ETYS - news) $11.50 to $57, Geocities (Nasdaq:GCTY - news) fell $8.75 to $93 and eBay lost $7.22 to $183.25.
But the list of the day's net loss leaders did not tell the full story of the steep drops many other companies have sustained gradually.
Infoseek(Nasdaq:SEEK - news), for example, was off $2.31 at $42.875 -- less than half its high for the year, and the women-focused portal iVillage Inc (Nasdaq:IVIL - news), down $7.94 at $41.69, has dropped to less than a third of the price it hit shortly after its initial public offering two months ago.>>
----------------------------------------------------------------------
Venkie: All areas of the tech sector are getting hit. I will not let some ANALysts talk me out of my remaining DELL shares or any of my internet shares. IMO...AOL,CMGI,DELL,NETP,YHOO and many of the others will come roaring back. We may have a rough ride until we get the re-bound though <GG>..!!
Best Regards,
Scott |
