Not only are investors snapping up equities in online companies, they are also carrying out deals via the Internet.

John Penycate reports on the dangers of investing in Internet shares

Now the craze is on its way to the UK too, with more and more people dealing in shares via brokers whose services are provided at knockdown prices via a Website.

Several companies now offer dealing in UK stocks via the Internet.

One of them reckons it is securing 500 new investors each week.

The trend threatens to fuel a surge in company values which in the US has led to some staggering results.

Given that most of the Internet firms have to date failed to make a cent in profit, the following valuations make for breathtaking reading:

• Internet search directory company Yahoo is worth more than Rupert Murdoch's News Corporation.
  
• Internet bookseller Amazon is worth more than the Texaco oil company.
  
• Shares in the Internet content provider The Globe shot up more than 10 fold during the first morning of trading in its stocks last November.

A new breed of investor, dealing online

Copy cats

As one analyst put it: "Many investors are simply gambling. We are concerned that people can become greedy and swept up in it."

Sitting at home at their PC monitors, online investors often hold shares in a particular company for short periods of time, sometimes only for a few hours. They tend to invest in companies in which they hold an interest, that often means technology and Internet firms.

As the stocks edge upwards they simply sell and make a quick profit. The practice becomes addictive and as more and more people do it so the stocks keep rising in value.

These are early days for the UK's online investors but those in the know reckon the feverish level of activity in the US will not be repeated with such alarming results in Britain.

In the past six months many US shares have simply tripled in value.

As the UK hopes for a more sober approach among its online investing community there are analysts across the Atlantic who believe it is not a question of if the Internet share bubble will burst, but when.