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October 7, 1999

QXL IPO Fails to Make Impact

By CBR Staff Writer

European auction site Plc failed to impress investors with its long-awaited initial public offering yesterday, finishing the day at 2.07 pounds ($3.42) per share, a 6.5% premium on the offer price of 1.95 pounds ($3.22), after dipping as low as 1.91 pounds ($3.15) at one point during the session. The group’s performance was eclipsed by yesterday’s recoveries from Freeserve Plc and eXchange Holdings Plc, which both rose around 8% on the back of Yahoo! Inc’s healthy third-quarter earnings.

A QXL spokesperson said the group was happy with the first-day showing, saying the IPO came at a difficult time for UK internet stocks. She stressed that QXL is looking for sustained growth over the longer term. Freeserve obtained a first day premium of 48%, and took over a month to drop below its offer price, while eXchange gained a paltry 4%, before dropping considerably lower almost immediately.

QXL made 54.6m pounds ($90.2m) in the London Stock Exchange and Nasdaq flotation, and the offer valued the firm at 263m pounds ($434.5m). The offer was eight times over-subscribed which, while impressive, failed to live up to Freeserve’s predicted 30 times.

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