- The Guardian,
- Wednesday March 15 2000
After months of anticipation and hype, the internet shopping business Lastminute.com finally joined the stock market yesterday and immediately crystallised a £150m paper fortune for its founders, Brent Hoberman, 31, and Martha Lane Fox, 27.
Mr Hoberman and Ms Lane Fox, who have become pin-ups for the new breed of net entrepreneurs, were in their Mayfair offices early yesterday to watch the newly floated shares soar from a sale price of 380p to 555p in minutes, valuing the 19-month-old company at £835m at one stage. At the end of the day, after a frenzy of trading on the stock market, the price settled at 477p.
"I'm not quite myself today," said Ms Lane Fox, trying to compose herself for one of several TV interviews first thing in the morning. Under strict instructions from her American investment bankers at Morgan Stanley not to make any leading comments on the share price or value of Lastminute.com, she restricted herself to explaining how the £113m raised from the flotation will be used to finance the expansion of the Lastminute sales concept across Europe and then around the world.
But the 200,000 investors who rushed to buy shares in the flotation - registering their details in advance at the company's website - suffered severe disappointment. Shares for the public were distributed evenly among applicants, leading to allocations of 35 shares for each investor, which were worth £167 last night. After paying dealing charges and tax, any new-issue speculator selling the shares will be lucky to make a profit.
Lastminute started off by selling cheap flights online, but branched out to offer everything from flowers and chocolates to theatre tickets. Mr Hoberman and Ms Lane Fox believe there is a huge market potential in selling to "asset rich/time poor" customers who are too busy to organise their shopping and who tend to be natural last-minute purchasers.
Aside from luring regular internet shoppers, Lastminute.com also expects to see a spectacular increase in purchases made over mobile phones - travellers, for example, might book a flight that way, then also choose a restaurant at their destination through their mobile internet connection.
Lastminute is also developing services through digital TV, after signing deals with cable companies NTL and Cable & Wireless Communications.
Mr Hoberman, said his immediate task now was "to keep moving fast, to execute the business plan".
Many commentators, though, have questioned the valuation attached to a business that will not make a profit for the foreseeable future and which has transacted deals, such as flight purchases, worth only £4.3m during the last three months of 1999.
But Julie Meyer, one of the founders of First Tuesday, a networking club for budding cyberspace entrepreneurs, said she was confident about Lastminute. She pointed out that it commanded a scarcity value among investors.
"They were pioneers, out there early, and they have built a great brand name. It is now virtually impossible for someone to replicate it. As for value, it is like beauty - all in the eye of the beholder," she said, adding that Mr Hoberman and Ms Lane Fox have been instrumental in widening the popularity of the net in Britain. "These guys have changed the face of e-commerce in the UK. Great brand names do not disappear overnight."
