SAN FRANCISCO -- America Online (AOL) was in the news today for all the wrong reasons.
AOL dropped 7 11/16, or 7%, at 100 1/4. The company suffered from reports that executives sold 4 million shares earlier in the day, as well as from some bad publicity that it was blocking access to its instant messaging market by other Net companies.
AOL said today that a number of its executives, including Chairman Stephen Case, had sold 4 million shares of stock in block trades this morning.
reported that Case had sold 1.5 million shares, or 9% of his holdings, leaving him with 14.7 million shares. President Robert Pittman reportedly sold 1 million shares, or around 13% of his holdings. He now has 6.78 million shares. Also, Senior Vice President Miles Gilburne sold 750,000 shares, leaving him with 2.05 million shares, while other executives and the Case Foundation accounted for the remainder of the 4-million-share block. News of the large sales from company executives was apparently enough for other investors to bail as well.
AOL was in the news over the weekend on reports that it was attempting to block access to its instant messaging market by
among other Net companies.
The AOL news contributed to an already weak Net sector.
TheStreet.com Internet Sector
index ended down 27.46 points, or 4.6%, at 564.39, trading near key technical
support around the 560 level. The sector has not performed well through much of the earnings season despite most companies reporting better-than-expected numbers. But the sector isn't seeing blowout numbers that have characterized recent reporting seasons, and with many of the high-profile names out of the way, traders are taking money off the table.
Jim Herrick, managing director of trading with
Robert W. Baird
, said post-earnings selling and continued interest-rate jitters were contributing to the selloff, but noted that volumes have been light, which was accentuating the move. He said the sector still has not had a "day of capitulation, where everyone says 'I don't want to own Internet stocks,'" which he said could indicate a bottoming out.
Other Net bellwethers suffered as well. The aforementioned Yahoo! closed off 11 7/16, or 7.8%, at 134 5/16. Also,
ended down 3 7/16, or 3%, at 104 3/8 ahead of its earnings report after the close.
closed down 8 5/8, or 7.5%, at 105 15/16. The online retailer held an analysts' meeting on Friday, but apparently said little to appease those who want the company to turn a profit sooner rather than later. And
, an Internet venture capital company, closed down 8 7/16, or 8.7%, at 88 3/4.