The unprecedented volatility of high-tech stocks last week sent shivers through the investment community. The business models of the network infrastructure companies are well- understood . . . The uncertainty comes after one of the most volatile weeks in stock market history. The Nasdaq dragged the Dow Jones Industrial Average along for the ride.
Some observers say the downturn in the market valuations of Internet firms is overdue.
And many heralded last week's correction as the return to more traditional investing based on revenue and profits. The greatest successes that investors have had in the Internet space have been in network companies. But these stocks have gotten almost too popular, and their valuations have become extreme . . . Everyone on Wall Street recognized that there had to be some belt tightening. Among venture capitalists, interest in broadband providers, optical equipment and component manufacturers remains strong.