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Profit-Taking Cools Hot Internet Stocks

April 24, 1998|From Times Staff and Wire Reports

Highflying Internet-related stocks came crashing back to Earth on Thursday, as investors rushed to take what amounted to a couple of days' worth of profits in many of the issues.

The declines in the recently red-hot sector were led by the smaller, more obscure names that had rocketed early in the week.

Market Guide, a stock research company, plunged $8.02 to $11.50 on Nasdaq. Its shares had zoomed 190% on Tuesday, to $23, after the firm signed a distribution deal with America Online.

Among other software and information stocks that had soared early in the week on hopes for Internet-related profits, PC Quote sank 69 cents to $2.13, Audio Book Club dropped $1.75 to $6.25 and 7th Level tumbled $3.16 to $4.53. On Tuesday, 7th Level was at $9.25.

More established Internet companies also saw heavy profit-taking.

Yahoo and other Internet directory stocks fell on concern that Netscape Communications may begin competing against them and cut into their advertising revenue. Netscape has been trying to build its Web site into a gateway that Internet users visit regularly.

Yahoo sank $6.19 to $112.19 on Thursday, while Infoseek dove $4.19 to $28.44, Lycos sank $7.75 to $54.13 and Excite slid $5.38 to $60.13. Netscape was off 31 cents to $24.44.

Meanwhile, K-Tel International--which set off the latest frenzy for anything Internet when it announced two weeks ago that it will sell its recorded music over the Net--plummeted $8.38 to $36.25.

The stock, under $7 two weeks ago, reached a peak of $49.50 this week as buyers fought for it.

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