Lastminute.com Makes Strong Debut
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Shares in the U.K's online late-offers specialist Lastminute.com rose around 40 per cent when first-day trading began Tuesday morning, valuing the company at around £1 billion ($1.58 billion).
However, the quarter of a million small investors who applied for shares were not especially happy with the outcome, securing just 35 shares apiece. Many savvy investors actually ignored the offering because trading costs would take most of the profit, even with the huge premium.
Founded in 1998 by Martha Lane Fox and Brent Hoberman, Lastminute.com has been the most highly touted Internet launch in the U.K. since Freeserve last year. In many ways its stock market debut has been a classic of its kind, with the shares themselves remaining unpriced until practically the last minute.
Potential investors in Lastminute.com were informed last week that the price range for the new shares had been changed to 320p to 380p, 30 per cent higher than previously indicated. In the event, the shares went on sale at the very top of the new range, rising to 497p during early afternoon trading.
Some analysts are already warning, however, that Lastminute.com will face stiff competition, not least from airlines selling tickets directly from their own sites. Both EasyJet and British Airways have dramatically increased the number of visitors to their Web sites recently.
Among the major investors in Lastminute.com are Cheetah International Investments with a 17.1 per cent stake now worth over £150 million ($237 million), Intel Corp., Amadeus Capital Partners and Global Retail Partners.
Lastminute.com operates sites in France, Germany, Sweden and the U.K., and has plans for Spain, Belgium and the Netherlands. It has over a million registered subscribers.