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Blodget cuts dot.coms
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August 7, 2000: 7:17 p.m. ET
Influential Merrill Lynch analyst downgrades 11 Internet stocks
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NEW YORK (CNNfn) - Henry Blodget, the Merrill Lynch analyst who has been a longtime bull on Internet stocks, on Monday downgraded the stocks of 11 Web companies, several of which already trade in the low single digits and are more than 80 percent off their 52-week highs.
In a research note issued Monday, Blodget said his view of Web industry fundamentals remains similar to what it has been for the past year.
"We believe we have entered a more mature phase of industry development, in which sector growth opportunities are easier to quantify, capital is scarcer, analytical and valuation discipline have again become critical for successful stock picking, and the tide is no longer rising fast enough to lift all boats," Blodget's note said.
Web stock investors appeared to disregard Blodget's downgrades. The Goldman Sachs' Internet Index, which tracks 21 Web companies, rose 11.92 points, or almost 3 percent, to 427.21. The Internet advertising firm DoubleClick (DCLK: Research, Estimates), which was one of the stocks Blodget downgraded, rose 3-7/16 to 38-5/8.
"The timing of this reset relative to the current stock prices is, again, not a prediction of future weakness. In fact we believe that many of the stronger stocks may be near seasonal bottoms," Blodget said.
The stocks that the Merrill analyst cut include well-known names, such as Barnesandnoble.com (BNBN: Research, Estimates), Buy.com (BUYX: Research, Estimates), eBay (EBAY: Research, Estimates), eToys (ETYS: Research, Estimates), and Webvan (WBVN: Research, Estimates), to name a few.
Several of Merrill's downgrades come after the horse is already out of the barn, as the affected stocks have plunged to single-digits since the start of this year. Etoys (ETOY: Research, Estimates), for example, now trades around 4, down from a 52-week high of 86.
Blodget left unchanged his rating on Amazon (AMZN: Research, Estimates), the Web retailer he once correctly predicted would hit $400 a share. He also left unchanged his ratings on America Online (AOL: Research, Estimates), Priceline (PCLN: Research, Estimates), and Yahoo! (YHOO: Research, Estimates). 
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