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Bad day for Net stocks
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February 9, 1999: 5:14 p.m. ET
Tech sector gets bruised despite big link-up involving No. 2 Net portal Lycos
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NEW YORK (CNNfn) - Tech stocks took a drubbing Tuesday, with many Internet stocks tumbling on concerns the sector is highly overvalued and questions about the merger between USA Networks Inc. and Lycos Inc.
Earlier, USA Networks, parent of television's Home Shopping Network and the ticketing service provider Ticketmaster, announced plans to acquire Lycos in a complicated deal that provides only a modest premium to Lycos' share price.
While the deal will create a company with more than $1.5 billion in annual revenues, investors apparently were disappointed it did not appear to carry a big premium for Lycos shareholders.
Lycos (LCOS) plummeted 33 to 94-1/4 and TicketMaster Online-Citysearch (TMCS), a separately-traded unit of USA Networks that is also part of the deal, sank 15-1/2 to 42-1/4.
Meanwhile, USA Networks (USAI) - suddenly seen as undervalued to analysts - leapt 3-11/16 to 41-5/8 after the deal was announced.
The declines in Internet stocks took their tool on Nasdaq, where the Nasdaq Composite suffered it third-worst point loss in history Tuesday, tumbling 94 points to 2,310.
Other portals also down
Among the top rivals of Lycos, Yahoo! (YHOO) dipped 17-7/8 to 14-3/4, Excite (XCIT) fell 8 to 85-1/8 and Infoseek (SEEK) dropped 7-7/8 to 57-1/4. Online bookseller Amazon.com (AMZN) fell 9-1/8 to 100.
Elsewhere in deal-making, Internet news service CNET (CNET) got punished after unveiling a $14.5-million, two-and-a-half-year deal with America Online (AOL) to provide the online giant with software and hardware buying guides.
CNET sank 25-3/4 to 98-1/2, while AOL slipped 11 to 148.
And the Internet domain-name registrar Network Solutions (NSOL) sank 26-1/8 to 148, after unveiling a secondary offering of 4.58 million shares at $170 apiece.
Among heavyweights of the sector, Dow issues IBM (IBM) fell 4-1/4 to 162-3/4 and Hewlett-Packard (HWP) slipped 1-1/4 to 70-5/8.
Dell Computer (DELL) dropped 6-1/4 to 97-13/16, Microsoft (MSFT) fell 5-3/16 to 160-1/16 and Intel (INTC), which reaffirmed its earnings target despite price cuts unveiled Monday, lost 6-11/16 to 125-5/16. 
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