Float scrambles Egg

By BBC business reporter Adam Kirtley

The Prudential was very keen to make sure its Egg flotation went off smoothly.

Dot.coms have been in the news for the wrong reasons recently, and share prices have been volatile to say the least.

Indeed, several companies have postponed, or cancelled, their flotations because of the uneasy climate.

At first it looked good for Egg.

Institutions were keen to get a slice of the action, with share applications nine-times over-subscribed.

Although nothing like some of the previous dot.com flotations, given the drubbing "new economy" shares have suffered in recent months, it was good enough.

Problems

The flotation was in itself high tech.

Only Egg customers with access to the internet could apply, and their share allocation was e-mailed to them last night.

In that e-mail was a share customer number, and a link to the Lloyds TSB registrars website, where shares could be sold, albeit on a conditional basis pending formal acceptance of Egg on to the stock market on 19 June.

It was here that things started to go wrong.

The link to Lloyds was not working at 0700 GMT, when trading in the shares started.

The share price leapt from the 160 pence flotation price to 190p.

While institutional investors were able to trade with their own stockbrokers, private investors could not.

Eventually, just after 0800 GMT, the website was working, but then another problem appeared.

To sell your shares, you had to enter in your customer account number, sent as part of the e-mail telling you how many shares you had been allocated.

That customer number, in many cases, didn't work, so private investors were still stymied.

Human error

The reason, it transpired, was that a zero had been missed off the front of the customer number by mistake, which took some time to rectify.

Prudential wanted to avoid the problems faced by Lastminute.com, whose launch was marred by technical difficulties.

Evidently it failed, and yet again some small shareholders were left out of pocket because the hi-tech systems used for the launch failed.

The problems have now been ironed out, and investors are able to trade as normal.

But this was a share issue where many wanted to "stag" the market, selling instantly to realise an instant profit.

They weren't able to do that, through no fault of their own, and that has resulted in just the sort of publicity the company was dreading.