Letsbuyit postpones flotation

The fewer buyers of its shares, the cheaper the price

Online retailer Letsbuyit.com has postponed its stock market flotation.

The move came after it decided to slash the price of its shares following poor demand from investors.

Trading in the shares had been due to start on Wednesday on Frankfurt's technology-dominated Neuer Markt.

But its decision to lower its share issue price range to between 3 and 4 euros, down from its initial price range of 6 to 7 euros will push back the offering to next week at the earliest, because of stock exchange regulations.

The difficulties affecting Letsbuyit's initial public offering became clear earlier this week when the company extended its subscription period for shares on Monday by one day to attract investors.

Bank pulls out

Then it emerged that one of the four banks handling the flotation, Sal Oppenheim, a German private bank, had pulled out before the sale of shares began.

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.

The company had originally pencilled in its flotation for May, but postponed it because of adverse market conditions.

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

As a result, technology shares have been increasingly volatile.

Online retailers hit

Online retailers have been particularly hard hit by the stock market slump in technology stocks 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 stock market flotations.

But letsbuyit management remained upbeat about the company's prospects of successfully carrying out the offering.

"This is not an easy environment in which to be going to market. But we, our lead bank and our shareholders remain confident in our ability to raise financing in this initial public offering," said the company's chief executive Martin Coles.