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Netscape shares in record-breaking run

With Netscape Communications heading toward the finish line of its acquisition by America Online, share prices for both companies rise.

With Netscape Communications heading toward the finish line of its acquisition by America Online, share prices for both companies rose today.

Netscape continued to break records, rising 2.88 to 93.88 after hitting a high of 91 yesterday. AOL was up 2.69 at 104.69 in midday trading.

The pending acquisition by AOL is returning Netscape's stock to its glory days, when investors were in awe of its tremendous run-up within a short span of time.

Netscape, which went public in August 1995, saw its stock soar more than sixfold within a five-month period to hit its former historic high of 87, adjusting for splits.

But faced with increased competition from Microsoft and other contenders, its stock price eroded over time to hit as low as 14.88 in late January 1998.

Netscape's share price recovered some of its lost ground last year as the company revamped its business strategy. Netscape also announced it would link its e-commerce software to its Netcenter portal and place more emphasis on its Net strategy.

Rumors of a pending acquisition by AOL also drove the stock up, resulting in a nearly threefold increase by the time the deal was announced in late November.

Since then, Netscape's shares have doubled.

AOL, under its acquisition agreement, will exchange .9 of its common stock for every share held by a Netscape investor.

And as AOL's share price rises, it pulls along the price of Netscape. For example, Netscape shares jumped more than 9 points in late December after AOL was added to the Standard & Poor's 500 Index.

The deal is expected to close this spring.