Discount brokerage Charles Schwab Corp. has notified
its online customers that it will not accept trades of four recent initial
public offerings, three of which are Internet stocks.
The Internet stocks on the list are Internet America Inc. and Abovenet Communications, which went
public Wednesday, and Infospace.com
Inc., which is expected to begin trading next week. Infinity
Broadcasting Corp., CBS Corp’s radio network which began trading Wednesday,
is also affected by the decision.
“These securities have been removed from electronic trading due to expected
volatility and fast-market conditions,” Schwab said in a notice to
customers posted on its Web site.
“Volatility and fast-market conditions could result in price quotes
significantly different from current trading prices and cause delays in
reports of order execution.”
Schwab last week raised its margin requirements for Internet stocks,
requiring investors to have more money to back their trades. Several others
took similar action late last month after several Internet IPOs went
through wide sprice swings.