SAN FRANCISCO -- To merge or not to merge? That was the question and the answer in the Internet world today.
Investors reacted positively to news that
merge with Internet properties from
. And there also was a positive response to reports that the
merger was off.
Xoom.com ended the day up 6 3/4, or 9%, at 81 7/8, but that was far off the 90 1/2 high it made on the open. The stock had rallied sharply on Friday as rumors of the deal
swirled and traders took profits after the initial spike. Also benefiting was
, which co-owns
with NBC and will own 13% of the new NBC Internet. CNet closed up 22 7/16, or 20%, at 136 3/16.
The Lycos-USA merger has been viewed unfavorably by investors since it was announced in
February. Lycos closed up 15 3/4, or 18%, at 105 1/4.
, which owns part of Lycos and also expressed some reservations about the deal, closed up 16 11/16, or 7.5%, at 237 15/16.
The Internet sector also was aided by gains in
, which has been battered after being left out of the deal for
. The stock was named as a pick of Rajiv Chaudhri of the
hedge fund in this week's issue of
. Chaudhri said the company has potential for earnings growth of 100% annually over the next several years and stock will be in the 175 to 200 range by the end of 1999. It closed up 10 1/16, or 9%, at 128 1/4.
Chaudhri also proclaimed
"the most significant story in the e-commerce space" and said it can get up to the 300 range over the next 12 months. It closed up 16 11/16, or 9%, at 193 3/8. And although Chaudhri panned
, it managed to close up 1 3/4, or 2%, at 89 3/4. Chaudhri has a target of 65 to 70 on the stock.
, another stock Chaudhri said he is shorting, retreated 2 1/4, or 7%, to 30 1/8. The stock has been the subject of buyout rumors
analyst Mark Fitzgerald in April.
Online brokerages got a boost from a report by
Volpe Brown Whelan
analyst Derek Brown, who said weakness in the Internet sector has created a buying opportunity in
. It closed up 9 7/16, or 8.5%, at 119 13/16. Brown also said losses in the sector in general had created a buying opportunity in eBay, CNet,
. Yahoo! closed up 8 1/4, or 5.6%, at 155 11/16 and Amazon.com closed up 10 9/16, or 8%, at 146 15/16.
Also on the upside was
. It closed up 2 1/16, or 5%, at 42 1/4 after
BT Alex. Brown
upped its rating on the company to buy from market perform. And
closed up 1 7/16, or 6%, at 26 3/16, after the PC seller said it was paring its distributor list from 40 to 4.
Also of note, shares of
continued to rise after the company reported record earnings last week. It closed up 12 1/4, or 14%, at 102 5/16. It closed more than 14 points higher on Friday.