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Thursday, 23 December, 1999, 16:29 GMT
Jelly Works rapid rise

London traders Internet shares are in short supply - and soaring

JellyWorks, a UK internet start-up firm, has seen its shares rise 2000% within three days of floating.

That rise was astonishing even in a year of spectacular - and to many seasoned analysts baffling - valuations of internet companies.

A total of 10% of the company was offered on London's Alternative Investment Market on Tuesday, with the shares priced at 5p.

Three successive days of large rises have seen each share multiply to be worth 99.5p on Thursday afternoon - a 20-fold increase.

That has increased the company's valuation from 10m to 200m.

Online dating

With a small proportion of shares offered, the rise was seen by analysts as further proof of the unfulfilled demand for any internet or technology related stocks.

All the more remarkable in this case was that JellyWorks was incorporated just two months ago.

Its rise echoes that of Knutsford last month.

That company was taken over by a host of well known business figures, including former Asda chief Archie Norman.

Its shares rose exponentially within a few hours merely on the basis of the directors' names and the promise of a big retail acquisition to come

So far, JellyWorks has agreed to invest $3m in two internet companies, and has options to acquire a portfolio of other investments - including one online dating company - for about 3.68m (US$5.9m).

'Fairly indiscriminate'

"There's a tremendous amount of latent demand in Britain for investments like this," said Richard Armstrong, a banker at Fiske & Co, one of JellyWorks' underwriters.

"People in the UK want to be able to invest in internet fever."

The concept of selling internet investment vehicles to the public is not new, certainly not in the US.

In August, investors scooped up the IPO of Internet Capital Group, a firm that invests in business-to-business internet ventures, pushing the American firm's shares up 1,075%.

"It's been a question of lots of promoters coming out with investment vehicles," said Mr Armstrong.

"Investors have been fairly indiscriminate in where they place their cash."

Online applications for funds

So far, JellyWorks has invested $1m in, a Swedish electronic investment bank, and $2m in Antfactory, a year-old tech-company incubator.

The firm points to what it says is Jonathan Rowland's track record in spotting internet firms with potential - such as 365 Corp and Demon Internet.

The company's website has an online process for entrepreneurs to make their bid for cash to help their start-up or expansion.

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See also:
23 Dec 99 |  Business
Shares hit new records
26 Jul 98 |  UK
Tiny in name, not in nature
12 Nov 99 |  The Company File
Ebookers shares soar on debut

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