Freeserve Plc, the ISP that has transformed internet access in the UK in just 10 months, confounded the many skeptics by leaping to a 48% premium when its made its debut on the London Stock market and Nasdaq yesterday.
While conservative analysts warned that a company with such a brief trading record and no profits should not be making a market debut, and advised clients to avoid the shares, those who ignored their advice ended the day sitting on fat profits. Though priced at the top end of the range at 150 pence in the UK and $23.67 for American Depositary Shares, the shares were 30 times over-subscribed and dealings opened in London at 222 pence, a 48% premium. This puts a market capitalization of 2.1bn pounds ($3.1bn) on a company which has become the UK’s largest ISP with 1.3 million users.
The success of the issue is important for a cluster of internet stocks waiting for an IPO. If Freeserve had bombed in the way that the snipers were hoping, it would have delayed the development of the whole sector in the UK.
