Investors continued to salivate over Internet incubators on Monday, with both Internet Capital Group (Nasdaq: ICGE) and CMGI (Nasdaq: CMGI) seeing tremendous gains.
Shares of Internet Capital Group, which owns stakes of companies such as VerticalNet, Breakaway Solutions and the soon-to-be public Onvia.com, soared 30 to 200 after receiving positive comments from Merrill Lynch analyst Henry Blodget. Shares of CMGI, which has stakes in companies including Lycos, Engage, Navisite and the soon-to-be public AltaVista, thundered ahead 49-9/16 to 326-7/16. CMGI also was mentioned favorably by Merrill Lynch.
Certainly, Internet Capital Group and CMGI are positioned to capitalize greatly on the growth of the Internet and e-commerce, but the companies’ how-high-is-the-sky valuations should give investors pause. Internet Capital Group is now worth more than $52 billion and CMGI is now worth more than $40 billion.