The recent damage in the Internet sector continued on Monday, with almost every major name getting pounded. Amazon.com (Nasdaq: AMZN) fell 8-5/8 to 105-15/16, America Online (Nasdaq: AOL) dropped 7-13/16 to 100-1/8, CMGI (Nasdaq: CMGI) tumbled 8-7/16 to 88-3/4 and Yahoo! (Nasdaq: YHOO) plunged 11-7/16 to 134-5/16. The story was much the same for smaller Internet companies.
eBay’s (Nasdaq: EBAY) better-than-expected earnings may seem somewhat reassuring, but uncertainty still reigns in the Internet sector, which is obviously where the stocks with the highest multiples still reside. Some of these stocks may look like bargains right now, but investors would be wise to tread carefully. If you do decide that now is the time to jump back in, you should probably buy the most well-known brands. Everything else seems like a rather large gamble right now.