Stock Watch: Onsale Gets Pounded after Downgrades

Shares of online retailer Onsale (Nasdaq: ONSL) plummeted 4-3/4 to 30-5/16 on Friday as analysts worried publicly about shrinking margins.

Onsale, which sells some computer products at cost and also operates an auction house, was downgraded by Everen Securities, Hambrecht & Quist, Needham and Co., Pacific Crest Securities and Raymond James on Friday.

On Wednesday, Onsale announced that it is offering free shipping on all products purchased through its atCost Web site and waiving the $5.00 to $10.00 transaction fee on each product through April 30. The move came two days after competitor Cyberian Outpost (Nasdaq: COOL) announced that it would offer free overnight shipping for purchases.

Wall Street seems to think the price wars have gotten out of control.

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