HIGH-FLYING .COMS

By BETH PISKORA

The .coms are turning into .bombs.

The high-flying Internet stocks, so recently the big favorites of investors, are crashing and burning faster than you can say "IPO."

Many of the online companies that had their initial public offerings within the past two years and watched their stocks zoom higher are now trading below their IPO prices.

And even as the technology-packed Nasdaq composite index stemmed a losing streak by turning up yesterday, many of the individual stocks in the Internet sector continued to slump -- with close to a dozen hitting all-time lows.

Yesterday's big losers included Agency.com, Fogdog, Egghead and Fashionmall.com.

"A lot of these companies were like premature babies, born before they were ready to go, and they needed a lot of care before their viability was assured," said Peter Cohan, author of E-Profit and president of Cohan & Associates, a venture capital and management consulting firm for technology companies.

"It used to be that venture capital firms or private investors would hand-hold a company through this difficult period," Cohan said. "But now public investors are left holding the bag."

Those same public investors couldn't have been happier last year when they bid a stock like iVillage.com from its IPO price of $24 to a high of $130. These investors didn't seem to care that iVillage is not yet a profitable firm.

But now, with the stock trading below the IPO price -- it closed yesterday at $21.38 -- investors are not so happy.

And iVillage is but one of dozens of Internet stocks that have fallen precipitously.

These companies aren't flirting with correction. They are in a raging bear market that some strategists believe could trip up the entire market.

"The story is mania," said Rick Berry, director of equity research at Centennial Capital. "The Internet mania has already started to unravel, but that's just the beginning. I worry where this trend might take us."

Even the subsectors of Internet stocks -- like the online brokerages, for example -- that are still trading higher than their IPO prices are significantly lower than their 52-week highs.

In fact, a list of the biggest .com winners from last year corresponds almost exactly with the list of the biggest losers so far this year.

Consider, for example, the fate of MyPoints.com, the unprofitable Web site where consumers can track their participation in loyalty programs like airline frequent flier plans. Last year, it shot up from its IPO price of $8 to close the year at $74. So far this year, it has lost 37.33 percent to yesterday's close of $46.38. Another big loser is Tickets.com, down 29.26 percent this year after a breathtaking ascent last year.

"As the realization sets in that the evaluations of these stocks are vaporous, investors are selling off the 'concept' names in favor of the companies with a proven business model," said Linda Killian, a portfolio manager at Renaissance Capital.

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