RNWK down 10%.Net stocks stumble as RealNetworks slumps
11:59 a.m. 06/22/2006 By Scott Banerjee Provided by
SAN FRANCISCO (MarketWatch) -- Internet-sector shares traded lower Thursday as RealNetworks Inc. lost as much as 9% after Goldman Sachs downgraded the stock, citing valuation.
The Dow Jones Internet Index (DJI_DJINET) was down 1% at 87.70, while the technology-heavy Nasdaq Composite Index (COMP) was down 12.49 points at 2,128.71.
Shares of RealNetworks Inc. (RNWK), which touched a multi-year high of $11.05 on Wednesday, traded down 8.6% at late morning to $9.90, as Goldman downgraded the company's shares to underperform from in-line.
Goldman said the shares have an $8 implied value, based on a multiple pegged at 15 times the company's projected earnings before interest, taxes, depreciation and amortization for 2007 -- below RealNetworks' recent trading multiple.
"We view the company's increased focus on developing its subscription model favorably, but revenue growth could be tempered," said analyst Anthony Noto.
