After hesitating early, the Net sector was in rally mode with the rest of the technology stocks.
TheStreet.com Internet Sector
index was up 36.30, or 3.0%, to 1267.09.
TheStreet.com New Tech 30 was up 24.06, or 3.1%, to 805.28.
were supporting the DOT after the Internet service provider said that it had reached the 22 million subscriber mark. It was up 1 7/16, or 2%, to 68 13/16.
Donaldson Lufkin & Jenrette
analyst Jamie Kiggen, AOL made it from 21 million subscribers to 22 million in 48 days, a sharp improvement from the 62 days it took them to add a million subscribers in the same time frame a year ago. It is currently adding new subscribers by 20,883 per day, according to Kiggen, which puts the company on track to meet his estimate of 1.6 million new subscribers by the end of the March quarter.
But note as we
pointed out back in February, AOL added 1.8 million subscribers in the fourth quarter of last year, so even 1.6 million-subscriber growth is a sequential decline for the company. And in the January-to-March timeframe of 1999, AOL said it added 1.8 million subscribers, so if DLJ's 1.6 million number comes in, it would be a decline from the same time period a year ago. And we stress that just because AOL announces subscriber growth numbers every month or so, it doesn't necessarily mean it's a positive for the company (take note,
In a note on the 22 million mark,
analyst Henry Blodget also noted that subscriber growth was behind what the company had for the same period last year, but wrote that last year's growth was driven in part by the movie
You've Got Mail
, which featured AOL prominently.
Blodget also put out a note on
, revising estimates downward for the online toy store's current quarter. eToys was up 1/4, or 2.19%, to 11 11/16. Blodget lowered revenue estimates for the current quarter to $23 million from $27 million and the loss estimate for the quarter to 32 cents from 28 cents. But Blodget stressed that the changes merely put Merrill in line with consensus estimates for the quarter and that he was "a bit aggressive" when making his original estimates following strong results in the last quarter of the year.
First Call/Thomson Financial
estimate for eToys fiscal fourth quarter is a 32-cent loss.
"It is important to note, these revised estimates are not the result of poor execution or weak demand in the quarter, but rather a lack of management forecasting following FQ3," Blodget wrote.
News for America Online rival
was not so positive.
put out a note on the company, reducing its first quarter "total" net subscriber addition estimate to 356,000 from 453,000. Analyst David Levy reported that EarthLink had more than 40,000 broadband subscribers, which put it ahead of its first quarter estimate of 30,000. However, he wrote that the downward revision was the result of increased churn in the company's dial-up business, and that he believed the uptick in churn was "primarily the result of increasing departures to broadband service in areas in which EarthLink does not yet have a competitive service offering."
Levy wrote that he remained bullish on the long-term outlook for EarthLink, "but we are concerned with near-term subscriber growth," and he "would suggest a more cautious approach to EarthLink shares in the short term." EarthLink was up 5/8, or 2.99%, to 21 1/2.
said it was looking into selling its Internet bank,
, which was launched less than a year ago,
The Wall Street Journal
reported. The newspaper said Bank One has hired
Morgan Stanley Dean Witter
to advise it on a possible sale. Bank One was up 9/16, or 2.07%, to 27 11/16. Online bank
was down 1/2, or 3.23%, to 15.
was down 6 5/8, or 13.38%, to 42 7/8 after the company said that it agreed to acquire
for $1.9 billion in stock. Weakness comes after PSINet said it would exchange 0.9 share of its stock for each share of Metamor, which put the value of Metamor at about $45, a huge premium over its Tuesday closing price of 16. Metamor was up 19, or 118.75%, to 35.