Magazine article American Banker

Security First Victimized in Web Stock Selloff

Magazine article American Banker

Security First Victimized in Web Stock Selloff

Article excerpt

Despite Security First Technologies Corp.'s especially strong performance in the second quarter, investors continued selling off its shares.

The Internet banking software company's stock closed Friday at $30, down 14% last week and off 62% from its April 22 high of $79.25.

Investors have been selling off their holdings in the Internet sector amid fears of rising interest rates, said Stephen C. Franco, an analyst at U.S. Bancorp Piper Jaffray. Stocks in the financial sector have also been hit hard in recent weeks.

Companies such as Security First, Cybercash Inc., Sanchez Computer Associates, and Checkfree Holdings Corp. "kind of get the double whammy of being Internet stocks in the financial services world," Mr. Franco said. "They get hit twice as hard."

Cybercash's stock fell 11% for the week, to $9.25 down 63% from its 52- week high; Checkfree fell 15%, 64% lower than its annual high, and Sanchez lost 14%, down 25% from its high.

On Thursday, Cybercash issued a press release saying there was "no reason related to its business operations that would warrant the decline" in its stock price.

"Cybercash's payment business remains strong," said William Melton, chairman and chief executive officer.

Atlanta-based Security First reported robust revenues of $15.7 million, up 245% from the same quarter a year earlier. The net loss from continuing operations narrowed to $2.2 million, compared with a loss of $8.1 million in the same quarter a year earlier.

The company lost 8 cents a share, compared with analysts' expectations of an 11-cent loss, according to the consensus estimate tracked by First Call.

"The numbers were a lot stronger than what most people were looking for," said Charles Wittmann, an analyst at First Union Capital Markets.

Security First's pending acquisitions of Edify Corp. and FICs Group NV are promising, he said. …

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