Letsbuyit turns Letsdropit.com

Founded in January 1999, Letsbuyit expanded quickly across Europe

Online retailer Letsbuyit.com is having jitters on the day before its stock market flotation and considering to lower its offering price well below the planned range of 6 to 7 euros.

Its stock has met little demand, and one of the four banks handling the flotation has pulled out of the deal.

Letsbuyit.com tries to bundle consumer demand on its web site to bargain for lower prices from suppliers. It operates in 14 countries and 12 languages in Western Europe.

However, during recent months investors have grown increasingly disenchanted with so-called business-to-consumer online ventures.

Since March, technology shares have been on a steady slide and adverse market conditions were cited when Letsbuyit postponed its first flotation attempt in May.

Grey market is gloomy

The firm obviously believed that investors' attitudes had changed, but when trading in Letsbuyit shares began on the 'grey market', their price quickly dropped well below the planned flotation price.

Overall demand for the stock appeared to be weak, with the company on Monday extending the subscription period for its shares by one day.

Another blow came on Tuesday, when one of the banks handling the issue pulled out of the flotation. Sal Oppenheim, a German private bank, said it had pulled out of the deal even before the sale of shares began.

Letsbuyit is now talking to institutional investor about a possible price adjustment, just one day before its launch on Frankfurt's Neuer Markt on Wednesday.

Letsbuyit's chief executive Magnus Wikman said the pricing range was "reasonable", but added that the firm was "of course considering different alternatives, of which pricing is one".

Still smarting from the boo shock

Technology stocks have been in the doldrums for months, but online retailers have been particularly hard hit after the high-profile collapse of sportswear and fashion retailer boo.com in May.

A number of firms have since been forced to postpone their stockmarket flotations.