The Streaming Media Sector (5/15/00 - 5/19/00)
The markets were down again, and I wonder when will people realize that the "times they are a changing." Stocks are (most notably Nasdaq stocks) in a funk, a downtrend, a correction, a bear market etc. 38 of the 57 stocks followed in the Streaming Media Index were down (again) last week and only 10 had gains of more than a dollar.
UP (GBIX, NTAP, PLCM, SIII, WEBT)
Globix Corporation (GBIX) made a nice move, it gained 2 1/2 or about 12% to close at 23 1/4. On Monday GBIX announced that they were involved in a partnership with Codepower, a New York based firm that plans on initiating the first open source code trading community and marketplace for IT professionals. Also on Monday GBIX released their SEC 10-Q form. Total revenues for the six months ending March 31, 2000 increased 162% to $34.1 million from $13.0 million for the same six-month period last year. GBIX reported a net loss attributable to common stockholders before extraordinary item of $52.7 million for the six months ended March 31, 2000 or $1.55 per share. That figure does not include an extraordinary loss of $17.6 million or $0.51 per share.
Network Appliance (NTAP) recouped almost 7 points and closed at 65 1/8. NTAP had an intra-week high of 72 5/8. On Thursday NTAP released a stellar fourth quarter and fiscal year earnings report. Net income for the quarter increased 128% to $24.5 million or 7 cents a share, compared to net income of $10.7 million or 3 cents a share last year in the same period. First Call was for 6 cents a share. Net income also shot up. For the fiscal year it increased 107% to $73.8 million or 21 cents a share, compared to net income of $35.6 million or 11 cents a share in the prior fiscal year. Despite this news, shares fell on Friday over 5%.
Polycom (PLCM) rose 4 15/16 to close at 63 5/16. Stifel, Nicolaus raised their ratings on NTAP Wednesday from a "Buy" to a "Strong Buy". PLCM also released their 10-Q SEC filling on Wednesday where they reported total net revenues for the three months ending March 31, 2000 were $67.3 million, an increase of $26.0 million, or 63%, as compared to the same period of 1999.
S3 (SIII) gained more than 25% (3 3/16) and closed at 15 3/4 Friday. On Monday Musicland stores (MLG) announced that they would distribute Rio digital audio players in their Media Play, Sam Goody and On Cue stores, and on their E-commerce Web sites. Mike Reed, director of marketing for SIII's Diamond Multimedia said "The agreement provides further proof of the mainstream adoption of digital audio by consumers." This recent move coupled with the increase in trading volume seems a little out of proportion for the news that came out last week. Something else might be up with SIII besides share price.
WebTrends Corporation (WEBT) spiked about 15% or 3 3/4 for the week and closed at 28 3/4. This is a far cry from the March 22 52-week high of 86 5/8. Monday WEBT released WebTrends Enterprise Reporting Server 3.0. The reporting product is aimed at high-traffic web sites and provides advanced web traffic analysis. Also on Monday WEBT released their quarterly report. Total revenue increased 245.3% to $10.4 million for the first quarter of 2000 from $3.0 million for the first quarter of 1999. Wednesday WEBT announced the addition of four new sales locations in the United States and Canada. WEBT is now located in 15 major metropolitan markets in the United States and Canada.
DOWN (AAPL, ISLD, MPPP, MXIP, SOFO)
Apple Computer (AAPL) was down significantly for the week; it lost over 13 points and closed at an even 94. That makes two bites in a row for AAPL--the week before last they were also down significantly. In a bit of bad news APPL announced on Monday that they would be delaying the awaited upgrade to the Macintosh operating system till next year. The system was supposed to be launched this summer. The news of the software delay though wasn't the cause for APPL's decline, unless it was some sort of delayed reaction. On Tuesday Shares of APPL rebounded to over 109 dollars. That move probably had to do with the market rally after the "unsurprising" Fed hike. Once that euphoria wore off, APPL and the rest of the tech heavy Nasdaq sold off. Still APPL's downward move outpaced the market.
Digital Island (ISLD) lost 4 15/16 and ended at 22 53/64. This loss comes on the heels of last week's 4-point plus decline. The 52-week high for ISLD is 156 15/16. On Tuesday ISLD announced that iNEXTV, an online video network, is using its Footprint On-Demand streaming media service to deliver content. ISLD's Footprint On-Demand service caches streaming media files in content distributors located across a global delivery network. On Wednesday ISLD announced that Footprint Interactive will be the first content delivery service that allows companies to Webcast live videoconferences without the need for prior scheduling with a service provider.
MP3.com (MPPP) the wildly fluctuating stock, dropped 2 1/2 to 11. These types of moves are getting pretty regular for MPPP. Last week it was reported by Reuters that Alanis Morissette plans to sell about $1 million worth of MPPP stock. MPPP was quoted as having a consulting arrangement with Morissette's Atlas/Third Rail Management Inc., an artist management group. MPPP granted Atlas/Third Rail the right to buy 658,653 shares of MPPP for 33 cents a share. Does this sale really mean anything? Who knows. One thing for sure, there will soon be a bunch of MPPP shares up for sale. MPPP said this week it will hold its "MP3 Summit 2000" on June 20-21 at the University of California San Diego campus.
MAX Internet Communications (MXIP) hit a new 52-week low Thursday 3 1/16. For the week MXIP lost over 30% (1 9/16) and closed at 3 1/4. On May 12th after the bell, MXIP released their third quarter results. The consolidated revenues for the third quarter ending March 31, 2000, were $140,853 with a net loss of 17 cents a share that is versus a net loss of 21 cents a share for the same period last year. That was not all; MXIP was also forced to restate their prior earnings calculations after they revealed that the majority of the sales from Brazil were booked in reliance upon documentation that was later found to be falsified. Reported sales for the previous 9 months were originally set at positive 10 cents a share, now after the revision they are being set at negative 46 cents. (See Chat Room Banter Spotlight)
Sonic Foundry (SOFO) got hammered for a 35% drop (4 5/8) last week and closed at 12 5/8. The week before, SOFO lost 4 7/8. What has happened to the once high-flying company? The yearly range on SOFO is 3 15/16 - 64 15/16. There was nothing to report for SOFO last week, except the misery of their shareholders. I would expect some sort of recovery for SOFO. (See this week's Stock Pick of the Week.)