Resonate (Nasdaq: RSNT) shares continued their dramatic descent Wednesday, falling $4.63, or 25 percent, to an all-time low of $13.81 despite some positive comments from WR Hambrecht.
The Internet software developer has lost 66 percent of its value since closing at $40.50 one week ago.
On Wednesday, WR Hambrecht analyst Prakesh Patel tried to stem the bleeding by reiterating his "buy" recommendation on the stock and a 12-month price target of $60 a share.
"In contrast to its stock price performance, we are confident that Resonate is making significant positive operational and financial progress," Patel wrote in a research report Wednesday. "Management is upbeat, customer satisfaction is high, and Resonate's technology is gaining recognition as the market leader."
Resonate isn't the only Internet software stock suffering these days.
DoubleClick (Nasdaq: DCLK), Akamai Technologies (Nasdaq: AKAM) and F5 Networks (Nasdaq: FFIV) are all trading at or near 52-week lows as investors continue their indiscriminate exodus from Internet stocks.
On Tuesday, Patel was unable to explain Resonate's recent collapse.
"I'm trying to figure it out," he said. "I've talked to their customers and to the company and they say demand is very strong."
In recent weeks, the stock actually bucked the general selling trend, gaining a couple bucks a share on days the Nasdaq composite posted triple-digit losses.
Patel theorized that because the company was presenting at the Wit SoundView and Goldman Sachs conferences, the stock may have gotten a bit ahead of itself.
In its third quarter, Resonate posted a smaller-than-expected loss, dropping $6.1 million, or 26 cents a share, on sales of $6.1 million.
First Call Corp. consensus expects it to lose 26 cents a share in its fourth quarter and 80 cents a share in fiscal 2001.
The stock moved as high as $50.63 shortly after its August initial public offering.
All five analysts tracking the stock maintain either a "buy" or "strong buy" recommendation.