Publish date:

Takeover Rumors Goose the Tech Sector

Amazon has its eye on Beyond.com? Gateway's admiring Earthlink Networks? It's all good chatter for tech stocks.

SAN FRANCISCO -- Merger and rumor news dominated trading in the technology sector, with a strong IPO market helping to provide a positive tone.

Internet software retailer

Beyond.com

(BYND) - Get Beyond Meat, Inc. Report

was the subject of much of the rumor speculation, with

Amazon.com

(AMZN) - Get Amazon.com, Inc. Report

seen as the suitor. Rumors had Amazon paying $48 a share for Beyond.com.

Beyond.com closed up 7 1/4, or 28%, at 32 7/8, while Amazon.com closed up 1/4, or 0.2%, at 117 3/4.

Earthlink Networks

(ELNK)

rallied for the second straight day on rumors that

Gateway

(GTW)

was in talks to buy the Internet service provider. Earthlink closed up 4, or 7%, at 61 1/4 and Gateway finished down 1/8, or 0.2%, at 64 5/8.

Shares of ISP and hosting company

AboveNet

(ABOV)

also soared after

Metromedia Fiber Network

(MFNX)

agreed to acquire AboveNet for roughly $1.6 billion in stock. AboveNet closed up 4 1/16, or 11%, at 40 13/16. Metromedia finished down 5, or 12%, at 37 1/2.

DoubleClick

(DCLK)

closed sharply lower, apparently in response to rumors that

CMGI

(CMGI)

TheStreet Recommends

was in discussions to purchase some of

Compaq's

(CPQ)

Internet properties, including

AltaVista

.

Tomas Isakowitz, an analyst with

Janney Montgomery Scott

, downgraded DoubleClick to accumulate from buy, citing DoubleClick's relationship with AltaVista. He warns that that AltaVista "now represents approximately 43% of DoubleClick's revenues," and CMGI, which owns a number of Internet advertising companies (Engage and Adsmart), will be able to compete with DoubleClick.

Jeff Epstein, executive vice president for DoubleClick, disputed Isakowitz' numbers and told

TSC

that revenues from AltaVista only represented 21% of the company's total first quarter revenues. Isakowitz could not be reached for comment. Epstein said DoubleClick has a three-year agreement with AltaVista with no exit provisions. He blamed investors for misunderstanding the nature of the agreement.

DoubleClick closed down 5 3/4, or 6%, at 84 15/16. Compaq closed down 3/8, or 1.6%, at 23 7/16 and CMGI closed up 4, or 4%, at 98 15/16.

The IPO market was a resounding success story today. Web software company

Ariba

(ARBA)

had a remarkable debut, climbing 67 points, or 291%, to 90. Ariba's software is used to automate purchasing of operating resources such as office supplies and computer products.

Also,

GlobeSpan

(GSPN)

, a developer of advanced digital subscriber line integrated circuits, closed up 27 5/16, or 182%, at 42 5/16.

Shares of

3Com

(COMS)

were punished after the company warned that revenue in the first and third quarters of 2000 could come below year-ago figures. Losses came despite 3Com beating earnings estimates for its fiscal fourth quarter. 3Com posted earnings of 24 cents a share, 1 cent higher than the

First Call

estimate and ahead of the year-ago 18 cents. The company also approved a 15 million-share repurchase plan. Nevertheless, it closed down 4 3/8, or 14%, at 27 1/8.