Some Non-Web Issues Soar With Net Shares, But Then Stumble With Others in the Sector
Some non-Internet stocks that managed to crash the Internet party have been finding that they, too, have got a splitting hangover.</br></br>Take CheckFree Holdings. The Norcross, Ga., company earns most of its money from electronic bill-payment services and from software used by financial institutions, businesses that existed long before the Internet.</br></br>But CheckFree's Internet bill-paying service is growing rapidly. Around the start of the year, investors embraced CheckFree as a back-door play on the blazing-hot Internet. By April 14, the stock soared to an intraday high of 69 1/8, up from 23 3/8 at the end of 1998.</br></br>Since then, CheckFree has continued trading like an Internet stock: It fell like a rock to as low as 33 5/8, and closed yesterday at 38 3/8, up 1 1/8 on the Nasdaq Stock Market. This 44% decline -- despite a recent rebound in sympathy with the Internet stocks -- is a bit steeper than those of Internet bellwethers America Online and Yahoo! in the same period. That is even though CheckFree, unlike them, has plenty of non-Internet revenue and -- egad! -- even non-Internet earnings, to buoy it.</br></br>Since the air started leaking out of the Internet bubble in April, it has been something of a mixed blessing for companies once tagged as backdoor plays on the Internet. Such companies can still garner a higher price-earnings ratio than run-of-the-mill enterprises with no Internet connection.