- guardian.co.uk, Saturday 7 August 1999 15.18 BST
Investors' increasingly tempestous relationship with internet stocks was reflected in the inauspicious start to trading in the eXchange, a company specialising in on-line personal finance, which was floated on the stock market yesterday.
The shares were priced at 200p and, while they opened at 238p and hit a high of 243p in grey market trading, they ended the day at 207p. This is a dramatic contrast to the experience of Freeserve, spun off from Dixons two weeks ago, which traded at a wide premium to its initial price in its first days of trading.
Despite the disappointing debut, the flotation of eXchange still allowed chief executive Paul Lindsey to cash in nearly 6m shares valued at £12m. Even after the sale, he still owns 24.4m shares - around an eighth of the company, which was valued at £407m at the flotation price.
Mr Lindsey said he was "delighted by the high level of interest and support that our customers and institutional and retail investors have shown in the eXchange".
The flotation came against a difficult backdrop for internet stocks, which were rocked earlier in the week by speculation that Microsoft was poised to offer free internet access around the world. If Microsoft, run by Bill Gates, does decide to introduce free access, industry analysts believe the current market leaders, such as America Online (AOL), could be dealt a severe blow.
However, Miles Saltiel, analyst at WestLB Panmure, said the recent sell-off, particularly in the US, appeared to have run its course for now. "You have to remember that internet stocks are volatile and will move when the wind blows," he said.
AOL, listed on the New York stock exchange, was yesterday trading nearly 3% higher after sliding earlier in the week. But Freeserve, quoted on the London stock market, was down 7p yesterday at 193p. Freeserve was floated at 150p and has traded as high as 247p.
