Stock over-hang fears flared out into the open at Deutsche Telekom after a large line of stock went through the market and sparked worries about the potential for further heavy share sales. Telekom tumbled to €23.03, a fresh intra-day low and a level not seen since November 1988, as Deutsche Bank placed the 44 million shares with institutional investors at €23.60, a 2.5 per cent discount to Monday's close.
Telekom later rallied gently from mid-morning, but the exercise served to remind the market of the shares' exposure to what many traders believe could prove a significant bear position from the beginning of next month.
September 1st sees the first release of the so-called lock-up on Telekom equity at the time of the acquisitions of Voicestream Wireless and Powertel, two US deals that cost a combined $28 billion. The first release involves some 230 million shares.
The identity of yesterday's vendor remained a closely-guarded secret. Best bets among traders pointed to Sonera of Finland or Spain's Telefonica, both of which have big stakes in Telekom.
By the close, Telekom was off 3.3 per cent at €23.41. The stock stood at €40 in January and above €100 some 14 months ago.
Aerospace group EADS did its best to play down the news of a reduction in 2003 deliveries by Airbus plus possible delivery delays to customers, but to little avail.
The shares crashed to the bottom slot within the FTSE Eurotop 100 index. EADS, which has a 80 per cent stake in Airbus, said its own targets for earnings growth this year were safe. The stock fell 5 per cent to €21.50.
BMW reversed early gains as initial investor enthusiasm for the group's second quarter results turned cautious in afternoon trading. WestLB Panmure downgraded the stock from "outperform" to "neutral". Volkswagen and DaimlerChrysler pushed higher with the latter adding 1.9 per cent at €53.22. But BMW came off 1.1 per cent at €39.95.
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