Amazon.com Leads the Way as Net Stocks Get Walloped

Net issues end broadly lower amid more post-earnings profit-taking. But theglobe.com bucks the trend to close up.
Author:
Publish date:

SAN FRANCISCO -- A list of the largest point losers on the Nasdaq today reads like a Who's Who of Internet companies.

Amazon.com

(AMZN) - Get Report

,

CMGI

(CMGI)

and

eBay

(EBAY) - Get Report

all faltered; toss in losses in

RealNetworks

(RNWK) - Get Report

,

America Online

(AOL)

and

Yahoo!

(YHOO)

and you have the makings of a broad selloff in the Net sector.

Amazon.com was most prominent, closing down 21 1/8, or 12%, to 150 15/16. The declines followed comments from

Barron's

columnist

Alan Abelson

, who said the stock is overvalued, and thought it was worth "at most 25, or, just as easily, something under 10." While Abelson may be boasting about today's decline, it appears it was more a case of Amazon being ripe for some profit-taking, and Abelson was merely the trigger.

In fact, if you had listened to Abelson over the past year, you missed a huge move in Amazon.com. A quick check shows Abelson ripping the company in March 1998 -- at the time, the stock was trading around 13, split-adjusted. It traded as high as 221 1/4 last week.

RealNetworks was the other stock that helped trigger today's Net selloff. The company

unveiled

RealJukebox

, its new streaming media software, today. Anticipation of the introduction helped rally the stock last week and traders merely sold on the news. However, shares of

GoodNoise

(GDNO)

, which is an MP3 portal, offering music for purchase or download in the controversial MP3 file format, rose. It closed up 2 1/2, or 15%, at 19.

Losses in other Net stocks could be attributed to profit-taking and rotation out of tech stocks into cyclicals, helping the Dow close over the 11,000 mark. Many of the Internet stocks have had sizable run-ups ahead of earnings, and with most of the earnings reports out of the way and few bargains in the sector, traders have elected to take profits.

Among the hardest hit stocks were those that have had the biggest run-ups over the past few weeks.

Priceline.com

(PCLN)

, which gained more than 70 points last week and reports earnings on Tuesday, closed down 23 1/8, or 14%, at 139 1/4. CMGI, which invests in Internet companies, closed off 19 1/2, or 8%, at 235 1/16. eBay, which reported earnings last week, closed down 17 1/2, or 8%, at 190 5/8. America Online closed down 9 3/4, or 7%, at 133, while Yahoo! was off 12 1/8, or 7%, at 162 9/16.

Bucking the trend was

theglobe.com

(TGLO)

, which beat earnings estimates. It closed up 1 3/8, or 2%, at 61 1/2, off its session high of 69 7/8 as it too was hit by the selling in Net stocks.