It's been a sobering week for many of the big-name Internet stocks, after a January that seemed mild compared to the harsh winter forecast for them.
It's been a down week for the
as a whole, especially today with a drop of nearly 4.4%.
TheStreet.com's Internet Index
, known as the DOT, is down 8.6% for the week, although it closed 30.6% higher today than one month ago.
Internet companies that had seen a balmy January were feeling the chill for a number of reasons.
decision to put a stop to
this week put an exclamation point on dot-com retrenchment by other large media companies. While many advertising-dependent companies had written off the first two quarters, the possibility of even lower consumer spending translated to further uncertainty for the second half of the year.
has fallen 12.6% this week, although its close today at $33, down 8.5% for the day, is still 17% higher than it was one month ago.
AOL Time Warner
dropped 12.4% for the week. While it is one of the biggest magnets for online ads, advertising plays a considerably lower part in its revenue flow than for, say, Yahoo. It's 47.5% up for the month.
, which came out with a very strong earnings report last month, still dropped 7.4% this week, but is more than 58% higher than it was one month ago.
The week was especially tough for
. The Internet's top shopkeeper fell again today and was down 35.6% for the week in which it announced earnings and layoffs. Amazon ended the day only 50 cents higher than it closed one month ago. Not because it acknowledged it was going to stop selling some of its lower-margin items today. There seems to be a slow-motion epiphany reaching even the most faithful that Amazon's valuation still needs some downward racheting.
Even for hardcore fans, "it's hard to look at it as anything but a risk," said analyst George Sutton of
Dain Rauscher Wessels
. Sutton downgraded the stock to neutral this week. His firm has not done underwriting for it.
Amazon has declared it will be profitable in the fourth quarter, he said, "but it won't be profitable again until the next fourth quarter." Even assuming top-line growth into 2002, Sutton said, valuing it as a retail stock still puts it far under today's close of $14.38, which was down $1.88, or 11.5%.