Going Gaga for Online . . . Again
All you had to do was mention the “I” word.
Companies clamoring, “We’re doing something related to the Internet too,” saw their shares surge as much as 118% on Monday:
* Houston-based Zapata Corp., a former oil company turned fish processor, said it plans to split into two publicly traded companies, allowing one to focus on the Internet by investing in or acquiring 21 Web sites. The news sent the stock soaring $11.63, or 118%, to $21.50 on the New York Stock Exchange.
Zapata, founded in 1953 by former President Bush, will continue processing fish into fish meal and fish oil and making food-packaging materials, while the new company, Zap Corp., will handle the Net business. Zapata said alternatives for Zap include a spinoff to shareholders or an initial public offering. Zapata also said it might repurchase as many as 5 million of its 23.2 million outstanding shares.
Analysts were quick to hail even Zapata’s recent failed bid to buy Internet search directory Excite Inc. for $1.7 billion. “There’s no reason you can’t buy yourself into the business,” said CIBC Oppenheimer’s Henry Blodget. He called Zapata’s bid for Excite “brilliant” because it raised the company’s profile.
* Spokane, Wash.-based Egghead.com Inc. shares soared 65%--on 35 times their three-month daily average volume--after the online software retailer said its fiscal first-quarter revenue from its auction Web site nearly doubled from the fourth quarter.
Egghead.com, which in January said it would shut its retail stores to sell exclusively on the Internet, had missed the surge in recent weeks as other Internet-related stocks reached new highs. But Investors were unswayed Monday by the company’s warning that revenue increases at its other two Web sites might not be as brisk in the quarter.
* Shares in Torrance-based online auction house Creative Computers Inc. were going-going-gone after it announced plans to spin off its Ubid Inc. unit, which sells computers, consumer electronics and other products over the Net. Creative Computers closed six of its seven stores this spring to focus on retailing through catalogs and over the Internet. Ubid, which held its first online auction in December, reported a loss of $895,000 in the first quarter.
* Internet service company Digital Courier Technologies Inc. said its Videos Now unit will receive prominent placement on America Online Inc.’s service. The news was good for a 69% jump in the stock.
* Audio Book Club Inc., the world’s largest seller of books on tape, sent its shares up 101% by announcing it has increased its membership to 340,000 through Internet advertising.
* Lycos Inc., the No. 4 Internet search directory, said it will split its stock 2 for 1. The split will be paid next month to holders of record on Aug. 14. The announcement fueled speculation that other Internet companies will follow with splits.
* Finally, seeing value in timing, Value America Inc., an Internet retailer that hawks everything from computers and office supplies to consumer products such as Pampers diapers, filed plans for an initial public offering. The Charlottesville, Va.-based company expects to raise as much as $86.25 million.
Web Hits
A broad range of Internet-related stcoks surged Monday amid enthusiasm for the sector.
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Ticker Pct. Company Symbol Close Change Zapata ZAP $21.50 +118% Audio Book Club KLB 19.38 101 Digital Courier Technologies DCTI 14.19 69 Egghead.com EGGS 14.81 65 Creative Computers MALL 11.88 61 Inktomi INKT 73.63 53 NetGravity NETG 27.00 41 Lycos LCOS 99.56 26 Amazon.com AMZN 139.50 13 Excite XCIT 107.00 8
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