Net Stocks Get a Dose of Reality

By Frank Pellegrini Wednesday, July 08, 1998
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NEW YORK: What goes way way up... The helium-filled stocks of Yahoo, Excite, Lycos and Amazon.com all got pricked today for a combined loss of some 40 points after online bookseller Amazon.com was downgraded from "buy" to "hold" by Montgomery Securities this morning. Has the Internet lost its lure? Not a chance, says TIME senior editor Joshua Cooper Ramo. "The sell-off today was investors finally showing some rationality after the past few weeks of run-ups," he says. "These are still neat companies. They still have a bright future. They've just gotten overvalued lately."

And although Amazon.com's 16-point free fall Wednesday morning is certainly sobering, the appeal of these companies has never been about earning money now -- just the promise of it in some glorious Net-driven future. And that lure remains irresistible.