- guardian.co.uk, Wednesday 22 September 1999 02.54 BST
Online auctioneer QXL.com yesterday offered investors the clearest indication yet of how wildly net share prices can fluctuate when it announced plans to float at less than a third of the valuation made in July by industry experts.
The business - which is only two years old - is to float next month with a valuation of between £212m and £242m - a level which would make founder Tim Jackson, a former journalist, a paper fortune of £35m.
Yet when word of the float began to leak in the summer QXL.com was tentatively valued at £750m.
Last month analysts' valuations had fallen to between £250m and £350m.
"It's well below what people were expecting, though a little above our fair value of £150m-£200m," said Miles Saltiel, an analyst at WestLB Panmure.
"Obviously it's a consequence of the weakness in internet prices around Europe.
"Of the 12 IPOs going on to European bourses since June all but two are trading below the price reached on the first day of trading. The average fall is 23%."
In Britain much of the concern has been driven by the dropping price of Freeserve, the largest internet stock. On Monday it fell below its July issue price of 150p for the first time and yesterday it closed down a further 9p at 137p, 45% off its high of 247.5p.
Exchange Holdings, the UK's second-highest-valued internet stock, yesterday fell 7% to 172.5p, more than a tenth below its 200p issue price in August.
QXL.com's chief executive, Jim Rose, said that 15,000 private investors had applied for shares as part of the £66m fundraising being handled by Credit Suisse First Boston.
He said the majority of the money raised would be used to finance the firm's brand development and marketing. QXL has 210,000 users and net revenues of £2.5m in the year to March. It posted an operating loss of £2.1m.
The exact share price - the guide estimates 180p to 205p a share - will be announced on October 7, the same day conditional dealings are due to begin on the stock exchange in London and on the Nasdaq index in the United States.
