BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

Thursday, 13 July, 2000, 18:21 GMT 19:21 UK
Letsbuyit to float on 21 July
The ant - mascot of
The fewer buyers of its shares, the cheaper the price
Online retailer hopes to hold its stock market debut on 21 July after twice postponing its share flotation.

The company earlier this week said it would put off its offering - planned for last Tuesday - after deciding to slash the price of its shares following poor demand from investors.

It had earlier postponed its flotation in May.

But it will now go ahead with the offering on Frankfurt's technology-dominated Neuer Markt, despite analysts' misgivings.

Even if the offering does go ahead on 21 July, analysts said the company would have a big hole in its financing.

Letsbuyit lowered its share issue price range to between 3 and 4 euros, down from its initial price range of 6 to 7 euros.

That means the company will raise a maximum of 356m, sharply lower than the planned 623m euros.

Financing problems

"If the IPO goes through, the company will be listed with a gap in its financing plan," said Peter Barkow, an analyst at HSBC Trinkaus & Burkhardt in Duesseldorf. 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 needs to fund its operations from the money raised in the share offering because of its rapid cash burn.

It currently has reserves of 15m euros, which are sufficient to cover it for the next two to three months.

"They are now trying to force an IPO because they absolutely need the proceeds from the flotation," one analyst said.

Other analysts said the company was basically trying to list its shares at the wrong time.

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 in May.

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

Search BBC News Online

Advanced search options
Launch console
See also:

12 Jul 00 | Business
Letsbuyit postpones flotation
11 Jul 00 | Business
Letsbuyit turns
01 Jun 00 | Business
US fashion portal buys Boo name
25 May 00 | Business
Silicon Valley's big sell
30 May 00 | Business gold rush ends
18 May 00 | Business
The future of e-tailing
18 May 00 | Business
From to Boo.gone
Internet links:

The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories