NBCi dips in shaky start on Wall Street
Shares of NBC’s Internet spinoff NBCi had a rough ride on their first day of trading Tuesday, coming to market on a nasty day for tech stocks.
NBCi opened at $92.50 and proceeded to drop 18%, closing at $76. Yahoo, America Online, Amazon.com and most other Internet issues, the high flyers of the recent bull market, posted losses as well. Moving against the grain, Walt Disney Co.’s online venture Go.com, which started trading in mid-November, rose 6.4% to $27.18.
Market players cited profit-taking as well as jitters at the inevitable dip in online shopping to come after the holidays. A new study by Internet researcher Cyber Dialogue this week indicated that growth of the Web’s audience may be slowing.
“We’re very pleased with NBCi’s stock performance for the day based at the fact that the entire market was down,” said NBC spokeswoman Maria Battalgia. The company was listed on the Nasdaq stock market through a merger with Xoom.com, which was already public. Xoom had consistently traded in the $45-$50 a share range, although its price had run up into the $80s in anticipation of the NBCi deal.
With the NBCi launch, the Peacock “takes the next step beyond traditional media platforms into the Internet to become an electronic commerce company,” said NBC president and CEO Bob Wright.
The publicly traded entity also gives investors their first and only way to buy into the NBC name. NBC itself is part of conglomerate General Electric.
NBCi was created in a complex fusion of several entities, including Snap, Xoom.com, NBC.com, NBC Interactive Neighborhood, AccessHollywood.com, VideoSeeker and a piece of CNBC.com.
Snap is NBCi’s flagship portal service, a new version of which was unveiled Tuesday.
NBC owns 47.3% of NBCi, while shareholders of Xoom.com hold 38.8% and Snap’s former parent CNET owns 13.8%.
NBC claimed that with all its assets combined, NBCi is the seventh most viewed site on the Internet. But some on Wall Street think the Peacock could have done more to market the new company or explain how NBCi’s various pieces fit together.
NBC, however, wasn’t able to be too aggressive in promoting the new Internet company until Xoom shareholders officially voted to approve the merger before Thanksgiving.
NBCi has agreed to buy about $400 million in advertising over the next four year on NBC’s broadcast network and cable nets and, separately, announced that it has signed a marketing and promotion deal with Clear Channel Communications. The giant radio group will tout NBCi across its stations, while NBCi will provide Snap’s search, e-commerce and other services to the stations’ web sites.