Monday, November 15, 1999 Published at 05:59 GMT
Business: The Company File
Ebookers shares soar on debut
Sunseekers are expected to head online to paradise
The UK-based online travel service, ebookers, saw its shares rise nearly 50% on the first day's trading in New York.
The continuing enthusiasm for internet-related companies meant the London-based operation finished the day's trade with a market value of £276m.
The founder of ebookers, Dinesh Dhamija, and his family, own about two thirds of the company, a stake now worth £184m.
Ebookers is the online spin-off of the long established Flightbookers travel chain in central London.
The value of the online business now outstrips Mr Dhamija's original bricks and mortar business which has annual sales of about $50m.
Ebookers, by contrast, has sales of about £10m a year, and reported a loss of £2m in the first six months of 1999.
But as with so many internet companies, the traditional relationship between profit performance and valuation is brushed aside by investors' beliefs of vast profits to come.
The take-up of the shares was greater than had been expected with the placing price set at $18, up from the range of $13-$15 set just over two weeks ago.
Prospects of European growth
Even that placing price seemed low once trading started, with them more than doubling to hit $43 at one point before ending the first day's trading at $26.50.
Part of the reason for the enthusiastic buying of the shares - which are also being placed on the Neuer Markt in Germany - was the belief that the European online travel market is set to grow rapidly.
It also gained from the 282% rise recorded by Microsoft affiliate Expedia - a US online travel agency - when it floated on Tuesday.
"The firm is on the leading edge of European e-commerce," said one analyst.
"Europe is regarded as a few years behind the US and is expected to be the next hot growth area, but barriers are low and the firm faces competition from traditional and larger Internet sites," the analyst added.
Ebookers offers travel products and services online including negotiated discount airfares and hotel and car rental bookings.
When the listing was announced last month Mr Dhamija said he wanted to use the money raised by the listing for a European expansion.
"Over the next three years, we plan to capitalise on our first-mover advantage in Europe and become one of the leading pan-European internet-based travel companies," he said.
In September the rival UK online travel agency, Lastminute.com, announced it was considering a flotation.
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