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Euro Net IPOs under threat
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April 17, 2000: 8:43 a.m. ET
T-Online provides hope that new-issue pipeline will not dry up
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LONDON (CNNfn) - The fortunes of T-Online shares, which made a successful stock market debut Monday, are crucial to the future of the European technology IPO market.
Although Deutsche Telekom (FDTE), T-Online's parent, was forced to slash its expectations of the price it could charge for in the Web company's initial share offering, the sale fared far better than several other recent stock market debutants in the high-tech sphere. Telekom raised  2.7 billion ($2.6 billion) by selling 9 percent of T-Online's equity. The shares jumped 20 percent Monday to 32.40, valuing the company at 36 billion.
Yes TV, a British supplier of video-on-demand services through high-speed Internet access lines, pulled the plug on its flotation Monday, blaming adverse market conditions. The company had been intending to offer a quarter of its capital for around £200 million ($320 million), although the loss of a key customer last week had already cast a shadow over the share sale.
The decision to delay the Yes share sale came after Internet portal AltaVista Co. (ALTA: Research, Estimates) said in the U.S. over the weekend that it was postponing its initial public offering, citing volatile market conditions.
However, back in Europe, United Pan-Europe Communications, the region's second-largest cable operator, said Monday it will press ahead with its plan to list chello, its high-speed ISP, although further choppy markets could derail the issue.
"T-Online is very important, we'll see how that does and we'll look very closely at the markets," a spokeswoman told CNNfn.com, emphasized that the plan to list chello by the end of the quarter was still on track.
High-profile failures
Several high-profile Internet IPOs have done very badly in recent weeks, sparking fears the pipeline of stock market newcomers could dry up. Such fears have been exacerbated by analysts' comments indicating the sell-off among technology shares has further to go.
George Hodgson, European strategist at ABN Amro, told CNNfn.com he expected a further 10 percent slide in shares of tech stocks on Wall Street. European shares will probably fall further, according to Hodgson, because their valuations were even higher than those of their U.S. counterparts. Hodgson believes professional investors will not resort to panic selling, but said it was harder to predict how individual investors would react to tumbling share prices. Retail investors have played a significant role in many of the Internet-related IPOs to hit the market this year.
Among the major casualties have been World Online, an Amsterdam-listed ISP, which was valued at 43 a share, or 12.2 billion, when it floated. Since then the shares have plummeted to 15 as valuation concerns and management issues caused investors to bale out. Chairwoman Nina Brink was last week forced to resign from the top job.
In Britain, lastminute.com (LMC), an online retailer, attracted enormous interest, and was valued at almost £1 billion after the first day's trading. Since then the shares have tumbled to around one-third of their issue price, disappointing many investors for whom the share sale represented a first toe in the equity market.  
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