The new year got off to a poor start for European technology and Internet companies, with German-quoted names providing a clutch of bad news.
One of the most innovative dot.com companies, the Neuer Marktlisted Letsbuyit.com, lost more than half its stock market value yesterday, the first day of trading since its shares were suspended last Friday. They closed at €0.52, down 58 per cent.
Last week Letsbuyit, which brings together online individual purchasers of goods to obtain lower prices from manufacturers, was granted protection from its creditors. Its prospects have been hit by a dwindling cash pile and negative operating margins.
Another Neuer Markt stock that took a pounding yesterday was Intershop, an e-commerce software company that was seen as one of the market's more solid companies. Its shares fell 70 per cent to €9.75 after Intershop cut its revenue and earnings forecasts for 2000.
The Nemax 50 index of the top 50 Neuer Markt shares fell 11.5 per cent to 2,530, another all-time low. Broadvision, a software rival to Intershop, which is also quoted on the Neuer Markt, fell almost 28 per cent to €10.74. One exception was software company Teamwork, which rose 22 per cent as speculative investors piled in. Teamwork has been dogged by financial problems since an investor bailed out of the stock, forcing it to cancel a capital increase planned for the summer to finance its expansion.
Intershop's announcement also hit its much bigger rival SAP, whose shares fell 12 per cent to €132 as investors renewed anxieties about growth prospects for the software sector globally. SAP's share price has more than halved since early September.
Other technology companies suffered too, with the Nasdaq's opening tumble of 5 per cent adding to their woes. Alcatel fell 6.9 per cent to €56.35, France Telecom was down 5.6 per cent to €86.80 and Marconi fell 5 per cent to €683. Chipmakers were weak, with STMicroelectronics down 8.4 per cent to €42.59, Infineon down 5.6 per cent to €37.36 and ASM Lithography down 6 per cent to €10.10.
The strengthening euro hit companies that derive significant proportions of their revenues from the US, such as Alcatel and the French consumer electronics group Thomson Multimedia, which fell 3.7 per cent to €48.
