Internet boom back on Paris stock market

PARIS, Jan 30 (AFP) – Shares in French Internet and telecommunications firm Iliad debuted Friday on the Paris stock exchange with a 35 percent jump in value, stirring memories of the euphoric years of the Internet boom.

As investors snapped up shares in the first Internet firm to float on the Paris stock exchange in three years, traders were left nostalgic for the good old days of the Internet boom that has since turned to bust.

Investor demand was so strong the shares were at first suspended from trading.

Once trading did get under way at mid-morning, the shares surged to EUR 22.01 from the price of EUR 16.30 set in its initial public offering (IPO).Shortly before midday, the shares had settled to a gain of 25.64 percent at EUR 20.48.

Iliad, whose main business is French Internet access provider Free, is the first Internet IPO to hit the French market since Liberty Surf in 2000 during the high-tech boom.

The company said earlier that the flotation of 13.31 percent of its share capital had been 25 times oversubscribed, indicating strong investor demand.

The huge demand reminded traders of the Internet boom in the late 1990s when investors would snap up shares in so-called new technology companies being floated on the stock market for the first time.

“It’s a nostalgia trip, like going five years back in time, but we’ll see if it marks a trend beginning – one swallow does not a summer make,” said one dealer.

At the height of the much-hyped new economy boom, Internet firms which had never turned a profit would see their shares rocket, making their often-young founders millionaires.

However, investor enthusiasm has since dried up as numerous scandals broke out over investment banks’ handling of IPOs, and a global economic downturn and broad stock market slump set in.

Founded in 1991, Iliad claims to be the second-biggest French Internet service provider and has interests in fixed-line telecommunications through subsidiaries One.Tel and Kertel.

To woo investors, the company, unlike many Internet firms that have never known anything but losses, could claim to have turned a net profit of 24 million euros (30 million dollars) in 2001 and 11 million in 2002.

One analyst at an independent brokerage said: “What’s making the shares rise so much is partly the fact that it’s a good share, and also a bit of technical euphoria.”

Subject: France news