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Wednesday, 21 March, 2001, 17:01 GMT
Lastminute joins 90% club

Shares in the UK's best known internet firm Lastminute.com, have now fallen more than 90% since its high profile flotation a year ago.

The shares, which debuted with a price of 380p, fell through the 90% barrier to as low as 37p on Wednesday before 'bouncing' back to close at 39.5p.

The latest fall confirms how lucky investors were to have been limited to allocations of 35 shares (cost 133) in the UK's highest profile and most over-subscribed internet stock market flotation.

Brent Hoberman and Martha Lane Fox
The flotation was a happy day for Lastminute's founders

The 380p-a-share offer was deemed an acceptable price at the time, 10 March, at the end of the week the global technology stock bubble peaked. There was a huge rush with 199,000 people moving in to snap up the stock.

Lastminute and its photogenic founders Brent Hoberman and Martha Lane Fox represented all that was good about the new economy in the UK.

A year on the picture is different.

For those who have held on, the shareholdings are more or less worthless. They are valued at little more than the cost of selling them.

A new economy symbol

It is familiar tale from the post dot.com bubble age, with Lastminute remaining a handy symbol of the UK new economy.

At the time of its flotation, the share price valued the firm at 735m.

This value has now dropped to 70m, a figure that more or less matches the amount of cash left in the bank from the float in March.

That suggests there is little confidence the company can do better than many online rivals, and survive long enough to start making a profit.

It also means that a takeover may be one way that the faithful few still holding onto its shares could see some upturn.

Relentless fall

But it is certain that any offer would not lead to shareholders recovering anything like a substantial slice of their initial investment.

It seems a long time since the first day of trading, when its shares soared to 487.5p, before the steady fall set in and set the tone of things to come.

Within the first week, its shares had fallen almost 1 below the issue price of 3.80.

Brent Hoberman and Martha Lane Fox
Brent and Martha were media darlings

And that was just the start. The slide has been fairly relentless since then, even brushing off the arrival of former Asda chief Alan Leighton to the board. And the purchase of French rival Degriftour.

Lastminute's founding duo remain resolutely upbeat on their public appearances, keen to stress that the firm has "executed" its business plan as promised in the float.

And the pair, together with chairman Alan Leighton, this week stumped up 110,000 to buy additional shares and prove their confidence in the firm's future.

The sum compares with the founding pair's combined stake in the company at the time of flotation of 127m.

Future prospects

They say that it was not their fault the shares were so highly valued at the float, insisting likewise that it is not their fault they are now so low.

They have extended the firm's operations to France, Germany, Italy, Sweden, Spain, the Netherlands and Australia, offering consumers travel, tickets, restaurant bookings and impulse gifts.

In its most recent set of results the firm said it had lost 11.7m in the final three months of 2000.

It also said it had 2.8 million registered subscribers, and had seen customer numbers grow 50% and sales 48% in three months.

The question is whether or not it will be able to turn those customers into a source of profit before the money runs out.

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See also:

12 Feb 01 | Business
Lastminute user numbers barely grow
04 Dec 00 | Business
Lastminute posts 36m loss
24 Nov 00 | Business
Investors turn cold on UK dot.coms
22 Feb 01 | Business
Dot.coms ripe for takeover
02 Mar 00 | Business
Martha my very dear
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