Net Stocks Torn Between Profit-Taking and Tech's Allure - TheStreet

Net Stocks Torn Between Profit-Taking and Tech's Allure

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Holy cow! Check out Yahoo! (YHOO) ; it's trading in the 160s. RealNetworks (RNWK) - Get Report? Bargain-basement priced at 86 3/4.

OK, Yahoo! and RealNetworks are two stocks that have split since Friday, but we figured that since investors get so excited when the companies announce splits, they should get a little excited when the stocks actually do split. Well, Yahoo! was recently down 5, or 3%, at 166 3/8, as its new and improved price was failing to excite traders. RealNetworks was off 2 3/8, or 2.7%, at 86 3/8. Also,

Sycamore Networks

(SCMR)

, which split 3 for 1, was down 5/8, or 0.6%, at 101 1/8, though it traded as high as 120 earlier in the session.

According to

Rightline.net

, a Web site that focuses on splits, stock splits on average outperform nonsplits by more than 8% for the year following the split. In addition, the site indicates that splits, on average, rise 4.35% in the 20 days prior to a split and 4.59% in the 20 days after a split. Finally, the majority of the split-effect performance comes in the 30 days surrounding the split execution date.

Roger Perry, editor for Rightline, extols the positives of splits on his Web site. Perry writes that "looking at a split as an independent event is completely missing the point. The split isn't only a one-time transaction; it's a powerful progression in value. Splits make shareholders feel great and engender in them a sense of greater wealth with little expense to the company. Splits are nothing? Nothing but goodwill endowed to shareholders."

Split stocks notwithstanding, Internet stocks continued to have a mixed session. With earnings season all but over and much of technology having rallied at the start of the new year, some traders have been wont to take profits. But tech still remains the favored play so money continues to flow into the sector, especially after strong fourth-quarter numbers and the potential for a strong first quarter. A rebound in the

Dow

today may be contributing to the recovery. (Check out our own

James Cramer's

take on this morning's activity and strategy for buying "when we can, not when we have to," in an earlier

piece.)

Among the big movers,

FreeMarkets

(FMKT)

was down 17 11/16, or 7%, at 222 1/4. Losses may be in response to news that

i2 Technologies

(ITWO)

had formed a joint venture with

United Technologies

and

Honeywell

(HON) - Get Report

to provide a Web site for aerospace products and services. i2 was one of the top performers, up 22 5/8, or 9%, at 263 3/8.

Phone.com

(PHCM)

was down 6 1/8, or 5%, at 115. The company said that it had acquired

Onebox.com

, a wireless messaging-services company, for around $850 million in stock.

Finally,

buy.com

(BUYX)

, the Internet retailer that went public last week, was down 4 1/8, or 19%, at 17 1/4. We

noted when the stock debuted last week that its lustre could fade quickly, in part because e-commerce plays have gone out of favor. buy.com reached a high of 30 1/8 in its first day of trading, topped at 30 on the second day, but has dropped in the three sessions since.