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Lastminute leaps on debut
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March 14, 2000: 4:51 a.m. ET
U.K. Internet flotation jumps 41% in oversubscribed share sale; worth $1.3B
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LONDON (CNNfn) - Lastminute.com, Britain's most frequently visited travel website, surged in its first few minutes as a publicly traded stock Tuesday as investors scrambled for a piece of the latest dot-com debutante to take Europe's initial public offering scene by storm.
Lastminute.com (LMC), the most closely watched Web flotation in Britain since Internet service provider Freeserve sparked Europe's Internet-IPO frenzy, shot up 535 pence at the market open in London, a 41 percent premium to its 380 pence issue price. By mid-morning, the stock had eased slightly to trade at 515 pence.
The initial jump meant the company's market capitalization swelled to 805 million pounds ($1.26 billion) in a matter of minutes from 571.3 million pounds at its offer price. Of the 33 million shares on offer in the IPO, only 20 percent are being allocated to individual investors, who are limited to only 35 shares each.
The early success of lastminute.com offered another case study in retail investors' appetite for Net-based stocks - even those with no profit to underpin the high hopes vested in them. Lastminute.com reported profit of only 409,000 pounds in the fourth quarter of 1999, up from 119,000 the previous quarter. Analysts say they don't expect the company to be profitable until 2002.
The company sold the shares at a price at the very top of the 320 pence to 380 pence range indicated before Tuesday's launch. It had already raised that range from an earlier indicated range of 190 and 230 pence, in response to strong demand. By Tuesday morning orders for shares exceeded the number being sold by 35 times.
Lastminute.com, founded in October 1998 by Brent Hoberman and Martha Lane-Fox, provides an online travel agency and takes a commission from sales of entertainment and gift products. Already in its short life the company has attracted such high-profile sponsors as Intel and Sony Music Entertainment, and has launched sites catering to French, Swedish and German customers.
"The IPO should enable lastminute.com to continue at the forefront of European e-commerce and to take our service to the next level for both customers and suppliers," Hoberman said Tuesday.
Thanks to an extensive marketing campaign, lastminute.com has already become one of Britain's most widely recognized Internet sites, attracting about 1 million registered users.
But in days preceding the IPO, the company has also been the object of reports in the British press questioning whether the valuations of companies like lastminute.com are justified. Some have suggested that the Internet bubble could soon burst. 
--from staff and wire reports
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