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O.C. BUSINESS PLUS | ORANGE COUNTY BRIEFLY

Ratings Cut Sends Buy.com Stock to New Low

August 08, 2000|Dow Jones

Buy.com Inc.'s shares slumped to a new low Monday after Merrill Lynch & Co.'s Internet analyst cut his ratings on the online superstore and 10 other stocks.

Analyst Henry Blodget also said he was reclassifying the 29 stocks he follows, offering a wider range of classifications to describe companies in a more mature industry.

A more subtle rating system is necessary because "the tide is not rising fast enough to lift all boats" in a maturing segment, he said. Furthermore, astute stock-picking will become more important during the transition to long-term growth from hyper-growth in the Internet industry.

Blodget lowered his ratings for Buy.com to "accumulate" for the near and long term from "buy." Near- and long-term accumulate signifies good growth prospects, improving financial performance and a justifiable valuation but lingering clouds of doubt on Blodget's part.

Buy.com's stock hit a low of $3 a share during trading Monday before closing at $3.06, off 59 cents, in Nasdaq trading. The shares traded as high as $30.25 in February after the company went public.

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