Net stocks outpaced an otherwise flat market Wednesday. Most of the action surrounded Net-infrastructure companies and a pack of IPOs.
TheStreet.com's Internet Sector index rose 1.27 percent. Nasdaq fell 0.02 percent to close at 3586.08, and the Dow dropped 0.35 percent to 11068.12.
The IPO juggernaut continued unabated, with Agency.com, Andover.net, NetRatings and Preview Systems all the recipients of big gains.
Agency.com appeared to be poised for big gains after lead underwriter Goldman Sachs more than doubled its offering price range, as institutional investors pumped up demand. The range was increased from $10 to $12 to between $22 and $24. The stock wound up pricing at $26 and hit the trading floor at $91. It traded as high as $98 before backing off to close at $76 - a 192 percent gain on the day.
The company, which builds Web sites for businesses, generated some of the biggest buzz on Wall Street this year as it neared its public debut. Ad giant Omnicom owns a sizable chunk of Agency.com, and the company boasts a client base that includes Sprint, British Airways and Unilever. It raised $142 million by floating 5.9 million shares.
Andover.net's Linux connection overshadowed the fact that its IPO was handled as a Dutch auction, in which investors name the price they are willing to pay for shares. Wall Street traditionalists have scoffed at the auction method, and some issues that have used it, such as that of Web publisher Salon, have seen weak investor response. Andover priced at the top of its $15 to $18 range, started trading at $47.50 and hit a high of $66.75 before closing at $65. The company, which provides online services and information for Linux users, raised $72 million by selling 4 million shares.
NetRatings, which provides Internet usage data, also priced above its range of between $14 and $16, selling at $17 and started trading at $27.25. Shares closed at $28. The company floated 4 million shares, raising $68 million. Nielsen Media Research, the TV ratings company, owns a stake.
Preview Systems, which makes content-delivery technology for Internet companies, was offered at $21 - $3 above the top of its pricing range of $16 to $18. It started trading at $57 and closed at $83.75. The company sold 3.8 million shares, raising $79.8 million. Softbank owns a large piece of Preview.
Data host Exodus Communications gained $21.06, or 14.57 percent, after J.P. Morgan analyst Mark Langner and Merrill Lynch's Henry Blodget picked up coverage on the stock with "buy" ratings. Langner also initiated coverage on three other Net-infrastructure companies with "buy" ratings: Akamai, Covad Communications and Verio. Akamai rose $15.50, or 6.86 percent, to $241.50; Covad slipped 88 cents to $59.25, and Verio gained $5.13, or 10.58 percent, to $53.63.
The action didn't end there for infrastructure companies. Digital Island, Inktomi and Sun Microsystems announced they would form an alliance for content distribution. Digital Island soared $45.31, or 65.07 percent, to $114.94. Inktomi gained $4.31, or 2.63 percent, to close at $168. Sun rose $6.38, or 8.85 percent, to $78.44. Entrust Technologies gained $8.31, or 15.63 percent, to close at $61.50 on the Internet security software maker's announcement that it will create a Web-based security network for health care facilities in North America.