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Net fears hammer Reuters
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September 23, 1999: 7:00 a.m. ET
U.K.-based news group's shares slump 17 percent on brokers' downgrades
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LONDON (CNNfn) - Reuters shares plunged as much as 17 percent in London Thursday as analysts turned bearish on the stock on worries about the effects of competition from the Internet on the company's Instinet electronic brokerage unit.
The U.K.-based news and financial information group got hit by earnings downgrades from all sides after the company flew London-based analysts out to New York for a presentation by senior executives.
"The fall is off the back of Instinet due to increased competition from the Internet and a sharper-than-expected slow-down in Nasdaq trading in the second half," Tobias Reeks, media analyst at Credit Lyonnais, told CNNfn.com.
Instinet operates the largest institutional trading electronic communications network in the United States. The company is currently expanding into the U.S. retail market and owns an 11 percent stake in online investment bank W.R. Hambrecht.
Reeks said the sharp downturn was due to a high proportion of analysts having been positive on the stock for some time. "There are a lot of bulls out there who think Reuters is the best thing since sliced bread," he explained.
The shares bounced back slightly from their session low to trade down 128 pence at 730 pence, a drop of 15 percent.
Among brokers understood to have downgraded the stock are Lehman Brothers, Salomon Smith Barney, HSBC Securities and Schroders.
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Reuters
Instinet
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