CNNfn tech stock report
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November 23, 1998: 5:44 p.m. ET
AOL-Netscape merger talks propel Internet shares through the roof
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NEW YORK (CNNfn) - Merger mania sent technology stocks soaring Monday, lead by high-flying Internet shares as two industry giants confirmed they were involved in merger talks.
America Online Inc. confirmed Monday it was in talks to acquire Netscape Communications Corp. for $4 billion in stock. The news sent AOL (AOL) shares up 4-3/8 to close at 89-1/4, while Netscape (NSCP) rose 2-3/4 to 41-15/16.
The deal, which also involves Sun Microsystems Inc., poses a direct challenge to Microsoft Corp. in the Internet content arena. Sun (SUNW) shares climbed 3-13/16 to 71-5/16, while Microsoft (MSFT) added 5-9/16 to 119-3/16. Analysts said an AOL-Netscape merger could weaken the government's antitrust case against Microsoft.
News of the AOL-Netscape talks energized the Internet sector as a whole. Yahoo Inc. (YHOO) soared 30-7/16 to 221-7/16; Lycos Inc. (LCOS) rose 4-5/16 to 65-1/16; EarthLink Network Inc. (ELNK) climbed 4-3/4 to 56-3/4; and MindSpring Enterprises Inc. (MSPG) rose 4-13/16 to 59-7/16.
Electronic-commerce companies also took off in Monday trade, as nine specialty retailers formed a Web shopping network, called ShopperConnection, to take on e-commerce giant Amazon.com.
Among the companies involved in ShopperConnection, Cyberian Outpost Inc. (COOL) surged 10-5/8 to 25; CDnow Inc. (CDNW) rose 1-5/16 to 13-1/2; and Preview Travel Inc. (PTVL) finished 2-1/16 higher at 17-3/16.
The news had no adverse effect on Amazon (AMZN) shares, however, which surged 37-3/8 to 218.
The other big e-commerce winner was online auctioneer eBay Inc. (EBAY), which jumped 46 to 193.
Elsewhere, computer shares enjoyed big gains. Hewlett-Packard Co. (HWP) rose 3-13/16 to 61-5/8. According to a published report, HP has hired outside consultants to take a "fundamental look" at the company.
IBM Corp. (IBM) gained 6-7/16 to 166-9/16, while Gateway Inc. (GTW) rose 4-11/16 to 61-5/16.
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