B2B Stocks Take a Hit, but Rebound Says Investors Still Believe

Business-to-business stocks slid sharply Friday on the heels of a downgrade of three highfliers. Still, their rebound off early lows suggests the stocks' many supporters continue to believe.

Ariba (ARBA Quote), Commerce One (CMRC Quote) and i2 Technologies (ITWO Quote) plunged 15% early Friday after Prudential Securities analyst Douglas Crook downgraded the trio to accumulate from strong buy on concerns about future revenue streams. At midafternoon the stocks had recovered somewhat, with Commerce One off 16 3/4, or 9.7%, at 156 9/16, Ariba off 10 5/8, or 4.8%, at 209 3/8, and i2 off 8, or 6.2%, at 121. The Nasdaq was up 100, or 2.3%.

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With these stocks having run up so sharply in the last six months, supporters say it's natural that a negative report takes the wind out of the sector, for a day at least. But make no mistake: Industry insiders have been discussing the issues the report raises, and with these young companies valued well into the billions of dollars, the questions aren't going to go away.

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