Net stocks steadied Wednesday morning as a widely awaited IPO came to market -- at the top of its expected pricing range, no less. And traders held their collective breath as an analyst came perilously close to calling America Online (AOL) a value play.
TheStreet.com Internet Sector
index was down 0.62 at 487.78 after pushing as high as 499.77 early on. The biggest news in a mixed market was the pricing of
(RHAT:Nasdaq) IPO at $14.
AOL was up 1 11/16, or 2%, at 86 11/16 following some positive words from
, but other Net bellwethers were mostly weaker.
Lehman analyst Brian Oakes put out a note on the Dulles, Va., online service provider titled, "Believe It or Not, It Looks Cheap!!!" He wrote that AOL's price/earnings-to-growth ratio "indicates that at these levels the company is trading at a 5%-40% discount to other high-tech growth companies. While tough to call it a 'value stock,' we believe it counters the perception that its valuation is extreme." Lehman has done underwriting for AOL.
Also among the big names,
was down 1 1/2, or 1%, at 126.
was off 2, or 2%, at 89 and
was down 2 11/16, or 3.5%, at 73 1/2.
was off 2 3/4, or 8%, at 31 3/4.
was reporting that Paul Allen's
had filed with the
to sell 400,000 shares.
The IPO market has been weak of late and two companies expected to go public --
, which makes software that creates online auction sites, and
, which operates three gardening content and e-commerce Web sites -- were postponed. But Red Hat's heavily anticipated IPO was priced top-range at $14, a day after the distributor of Linux software went against the recent trend by raising its price range to $12-$14 from $10-$12.
(INTW:Nasdaq), an Internet commerce software company, was expected to go on Tuesday, but now is scheduled to begin trading today. It was priced at $15. Also,
(MDCM:Nasdaq) was priced at $8.