Last year’s poor performance of Internet-related stocks has continued into the new year, with a drop of over 20 per cent in equity values recorded in the month to January 10.
The major slide in the stock market values of the predominantly US-quoted companies started in December, according to the ISDEX index, which tracks the performance of Internet stocks. The index is down from an early December peak of 482 to below 400 last week.
Steve Harmon, vice president of business development and senior analyst at Mecklermedia Corporation which maintains the index, says new media start-ups planning listings can no longer rely on the hype surrounding the sector to buoy up stock market quotations.
A handful of the 25 stocks monitored by ISDEX through 1996 gained between 27 per cent and 77 per cent in value during the year. But the majority lost value and the ISDEX index itself lost 38 per cent of its value in 1996.
The slump has been prompted partly by a readjustment in the US stock market in July, Harmon be-lieves. But it also reflects a more hard-nosed approach to the prospects for Net-related investments.