Glenn, do you remember the day when we sold Qxlc in the 100's?
>LONDON, July 11 (Reuters) - Shares in online auctioneer QXL.com Plc dropped to their lowest since late October on Tuesday as investors took fright at "cash burn" concerns surrounding its German bid target, analysts said.
QXL.com Plc was trading at 67-3/4 pence by 1420 GMT, down 8p or 10.9 percent but off earlier lows down to 65-1/2p, on decent volume of 3.4 million.
Shares in Germany's ricardo.de AG <RIDG.F>, which QXL.com is set to buy in a deal giving the German firm's shareholders 42.6 QXL shares for each ricardo share, dropped 18.2 percent to 32.3 euros at around the same time.
"The main thing is that ricardo was one of the stocks mentioned in a newsletter saying they would run out of cash in 18 months to two years. It's the same as happened with Amazon after the Lehman downgrade," said a London Internet analyst who asked not to be named.
A PricewaterhouseCoopers study last week mentioned eight German Internet companies, which it did not identify, as likely to run out of cash within two years.
German newsletter Platow Brief speculated later as to who the companies might be, sparking a sell off among the suspects similar to one seen in June after Lehman Brothers questioned the creditworthiness of U.S. e-commerce giant Amazon.com <AMZN.O>.
Chase H&Q analyst Peter Misek said the selling in QXL was overdone and suggested the shares should be above 300p given the potential of the recently announced ricardo deal, due for completion by late August.
"If anybody liked QXL four months ago, they should like the new company a lot more. It's one of few B2C (business-to-consumer) companies that's got a chance of making money," he said.
But Misek, like other analysts who spoke to Reuters on Tuesday, said the crucial and as yet unanswered question for QXL was how it would fare in the battle against U.S. rival eBay Inc <EBAY.O>.
10:31 07-11-00 |
