Digital Island wilts despite new coverage

Shares of Digital Island Inc. (Nasdaq: ISLD) tumbled 3 9/16, or 11 percent, to 27 7/16 Monday even though a pair of brokerage firms started coverage of the stock with "buy" recommendations.

Apparently, Digital Island was just a victim in the overall pullback in Internet and technology stocks.

Thomas Weisel and Bear Stearns both started coverage of the stock with a "buy" recommendation.

Digital Island offers a global network and related services for companies that are using the Internet to deploy key business applications worldwide.

Last week, it and Compaq Computer Corp. (NYSE: CPQ) signed a sales and marketing agreement under which Compaq will partner with Digital Island to provide global network services, and application hosting and content distribution.

Financial terms of the deal were not disclosed.

Digital Island has a less-than-outstanding debut in its initial public offering in June, moving up only 1 7/8 after opening at $10 a share.

The stock quickly stormed up to an all-time high of 40 7/16 earlier this month.