CNet Inc. (Nasdaq: CNET) raced ahead 18 percent Thursday, on strong volume after getting a kick from a Deutsche Banc Alex Brown upgrade. The firm raised its rating on the stock to "strong buy" from "market perform."
Shares were up 7 3/8 to 50 5/16, after reaching a high of 51 7/16 earlier in the day.
The upgrade was the most recent announcement in a string of bullish ratings. On September 21, Pacific Crest Securities and E*Offering also announced ratings on CNet, following news the company was raising its advertising rates.
Deutsche Banc Alex Brown analyst Lawrence Marcus said his 12 month price target for CNet is $75 a share. Other details of the upgrade were not immediately available.
Pacific Crest Securities analyst Steve Weinstein started coverage of CNet with a "buy" rating.
"When you create a market place, you don't just get a piece of the pie, you get a disproportionate piece of the pie as the market grows," Weinstein said. He said its still too early to tell how well CNet's 100 million dollar marketing campaign is going, though its one reason he's bullish on increasing market share. "There won't be only one winner in that space, Weinstein added.
E*offering e-content and commerce analyst Andrea Williams reiterated her "strong buy" rating on CNet, after learning that CNet will be raising the rates it charges advertisers by 15 to 20 percent. Williams had initiated coverage on CNET on July 19, 1999.
"The rate increase will begin in the fourth quarter 1999 and will affect the most highly trafficked areas of the site, including the popular e-commerce and product buying areas. Given CNET's category leadership position, and its demonstrated success in attracting technology buyers to its site, we believe advertisers will be receptive to the rate increase,'' Williams said in a written report.
The possible introduction of lead-generation or other fees for several of CNet's new product areas and CNET's latest television program, News.com, were also cited as causes for investor enthusiasm in Williams' report. The television show is a joint effort with CNBC, featuring news and financial information related to technology companies.
E*Offering, the online investment banking firm funded in part by E*Trade Group, Inc. (Nasdaq: EGRP) maintains a market in the shares of CNET, Inc.
ZDNet competes with CNet.
Reuters contributed to this report.