Broadcast.com Shares Skyrocket 50%

The flavor of the day for investors lapping up Internet stocks was Broadcast.com Inc., which skyrocketed 50% on Friday, the second straight day of explosive gains after a presentation by company executives for select investors at a closed-door technology conference in Arizona.

Broadcast.com’s stock had soared as much as 74% earlier in the day before Nasdaq officials halted trading and asked the company to explain the unusual market activity.

“We halted trading to see if there were some information that needed to be better disseminated,” Nasdaq spokesman Mike Shokouhi said. “They said that they had a company policy of not commenting on market activity.” Nasdaq officials, who had halted trading at 8:51 a.m. Pacific time, let it resume at 10:20 a.m., Shokouhi said.

The stock soared $40.44 on Thursday and then $65.50 on Friday, to close at a record $197.50. Earlier Friday, the shares peaked at $230.

It would be a violation of securities laws to selectively distribute material information without making such information available to the public. A spokesman for Broadcast.com said the company’s chief executive and chief financial officer had given people at the conference, sponsored by Morgan Stanley Dean Witter & Co, a “standard company presentation” that included “information contained in the prospectus.”

The company, which transmits audio and video programming on the Internet, first sold shares to the public for $18 each on July 17. It has yet to make a profit and is expected to report a loss of 25 cents a share for the fourth quarter, according to the average estimate of five analysts polled by First Call Corp.

“This is retail hysteria,” said an Internet industry analyst, who requested anonymity. “I’m sure Broadcast.com did a very good presentation at Morgan’s conference, but for the stock to be up $140 in 24 hours is crazy.”