Stock Watch: Investors Should Be Selective

It was tough to lose money investing in e-commerce in 1999, but there were some online retailers that truly struggled in the stock market. Shares of online retailer Value America (Nasdaq: VUSA), which is restructuring and reducing its workforce, closed 1999 at just 5-1/16 after trading as at nearly $75 earlier in the year.

Meanwhile, the initial public offering of online specialty stores like (Nasdaq: MTHR) floundered, and the stocks are now trading well below their offering prices.

Many analysts believe that a shakeout looms for online retailers, and investors should be selective when they invest in these companies or simply avoid them altogether. Investors that are interested in e-commerce have been putting a lot of their money into e-commerce infrastructure companies like Commerce One, Ariba, Art Technology and Viant. This trend is probably going to continue while many online retailers continue to struggle.

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