Net Sector Skips Higher, With Amazon as Today's Star Bellwether

The e-tailer surged 17% today after J.P. Morgan initiated coverage with a 12-month price target of 160.
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Follow the bouncing Internet ball. Up one minute, down the next.

It was a back-and-forth day for the Net sector, with profit-takers stepping into some stocks that had gotten a little too rich. But a number of issues posted strong gains, and there was little to suggest that the profit-taking seen elsewhere would spread.

TheStreet.com Internet Sector

index ended up 34.35, or 3.2%, at 1106.62. The DOT traded in a range between 1115.68 (an all-time high) and a low of 1052.00, finding support right around yesterday's low of 1053.66.

Amazon.com

(AMZN) - Get Report

was the bright spot among the traditional Net firms. The online retailer closed up 15 1/16, or 17%, at 103 5/8 after

J.P. Morgan

initiated coverage of the stock with a buy rating and a 12-month target price of 160. Analyst Tom Wyman wrote that he did not expect Amazon to generate operating income until 2002, but he forecasted the company's net revenue will grow by 67.5% in 2000 to $2.6 billion "in response to a wave of new Internet users discovering Amazon, the build-out of recently added stores, the addition of new aisles within the store and international expansion."

Amazon also got a boost from a report on the holiday season from

Media Metrix

. The report indicated the number of unique visitors to Amazon in the week ended Dec. 5 grew by 100% to 6.1 million from 3.1 million in the same period last year (numbers were rounded).

Media Metrix numbers showed traffic to e-commerce sites increased 44% over the same week last year and by 38% over the week that ended Nov. 28. Among other e-commerce sites,

eBay

(EBAY) - Get Report

showed a 64% increase in unique visitors for the week vs. last year;

eToys

(ETYS)

showed a 27% increase;

toysrus.com

showed a 451% increase;

Buy.com

showed a 441% increase;

barnesandnoble.com

(BNBN)

showed a 49% increase; and

CDnow

(CDNW)

registered a 39% increase.

Among other standouts in the sector,

Lycos

(LCOS)

closed up 8 3/8, or 11%, at 85 9/16 on a

Financial Times

report that

Lycos Europe

, a joint venture Lycos has with

Bertelsmann

, will go public next year.

Also,

Internet Capital Group

(ICGE)

finished up 28 3/16, or 13%, at 241 1/2 as it continued to benefit from news of a $50 million investment from

AT&T

(T) - Get Report

. Internet Capital also will be splitting 2-for-1 tomorrow.

i2 Technologies

(ITWO)

closed up 23 1/2 or 16.6%, at 165.

Robertson Stephens

reiterated a buy rating on the stock and raised its six- to nine-month price target on the stock to 200 from 120. Analyst Kash Rangan wrote that valuation upside "is likely based on the increasing recognition that ITWO's eMarketplace offering is a core B2B infrastructure play." Robertson Stephens has not done underwriting for i2.

The other big movers in the tech world came from companies that have something to do with

Linux

, the free operating system seen as an alternative to

Microsoft's

(MSFT) - Get Report

WindowsNT.

Nowhere was the frenzy more apparent than in

VA Linux

(LNUX)

. The provider of Linux-based solutions, integrating systems, software and services debuted today. It closed up an incredible 220, or 733%, at 250. It reached an intraday high of 320.

Also,

Andover.Net

(ANDN)

, a network of Web sites that provides content, community and commerce for Linux and Open Source communities that went public yesterday, closed up 14 1/8, or 22.3%, at 77 1/2 after climbing 250% yesterday.

Red Hat

(RHAT)

, which began the Linux craze, closed up 15, or 5.5%, at 286 1/4. Other Linux-related winners included

Corel

(CORL)

, up 10 15/16, or 39%, at 39 1/4 and

Inprise

(INPR)

, up 3 9/16, or 26%, at 17 5/16.