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THE INDUSTRY STANDARD EUROPE'S
I N T E L L I G E N C E R E U R O P E
This week in the European Internet economy
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translations by eTranslate
Wednesday 10 January, 2001
TOP STORY:
* Early investors furious as LetsBuyIt commits suicide
WORTH REPEATING:
* Who doesn't recognise a winner?
BRIEFS:
* News highlights of the week
BY THE NUMBERS:
* A bit too mobile
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TOP STORY
~~~~~~~~~
Early investors furious as LetsBuyIt commits suicide
A clash between the group-buying site's investors and former
management is jeopardising rescue attempts
By Rick Wray
An acrimonious dispute has broken out between the original investors
in LetsBuyIt.com, which shut its doors just after Christmas, and the
management team that unexpectedly left last week. Company sources say
management, led by chief executive Martin Coles, called time on the
business-to-consumer retailer just before a number of shareholders
would have been able to recoup some of their investment. The decision
angered the original backers of LetsBuyIt, represented by the firm's
supervisory board.
Investors who put money into LetsBuyIt before the IPO were due to see
lock-ins, which precluded them from selling shares, expire on 16
January. However, management would have had to wait until July - a
year after the IPO - before cashing in, by which time LetsBuyIt would
have had only enough cash to survive for one more month and their
shares would have been effectively worthless.
The question asked by the original LetsBuyIt investors is: why was
there a rush for the company to commit suicide? The chances of selling
shares after 16 January looked good, the group had performed well
during the pre-Christmas season and its stock was riding high after a
change of law in Germany boosted the company's chances of thriving in
that country.
However, the management team chose to seek creditor protection from a
court in the Netherlands, where the company is registered. As a direct
result, its Neuer Markt-listed stock dropped 70 per cent and the
original investors saw any potential windfalls disappear.
The following week the entire management team left the business.
Lawyers have been appointed to decide on the management's severance.
They have forbidden both the acting chief executive John Palmer and
the outgoing management team from commenting on the dispute, which
could cast a shadow over attempts to rescue the business.
----------------------------------------------------------------------
WORTH REPEATING
~~~~~~~~~~~~~~~
"Today, the market doesn't recognise anyone as a winner"
Tiscali's executive chairman Renato Soru comments on the company's
announcement it is to acquire ailing ISP Liberty Surf - and the
falling share price of both companies that greeted the news.
----------------------------------------------------------------------
BRIEFS
~~~~~~
COURT SURFING: British judicial history was made today when, for the
first time, a courtroom was hooked up to the Internet in the case of a
paedophile ring. Seven men, all suspected members of an international
paedophile ring known as the "Wonderland Club", were committed for
trial for conspiracy to distribute indecent images of children.
Sentencing in the case is due to take place on 12 and 13 February,
where the technology will be used to outline the case to the judge.
http://tm0.com/sbct.cgi?s=110982215&i=291073&d=861630
SURF'S UP: Ending months of speculation as to which company would step
in to save ailing ISP Liberty Surf, Tiscali announced on Monday its
intention to acquire the French company in a 646 million euro
stock-and-cash deal. However, both companies' share prices slipped
since the deal was announced. With France's Liberty Surf as part of
its stable, Tiscali, based in Sardinia, will have 10.7 million
subscribers and 4.9 million active users, making it Europe's
second-largest ISP after Germany's T-Online.
http://tm0.com/sbct.cgi?s=110982215&i=291073&d=861631
TUESDAY BLUES: Financial troubles at its parent company have once
again caused layoffs at London-based First Tuesday, casting doubt on
the future of the networking outfit. The company has already had to
cut staff as recently as November. Yazam, the privately held Israeli
investment firm that bought First Tuesday in July for roughly $50
million (52 million euros), has admitted it is currently strapped for
cash.
http://tm0.com/sbct.cgi?s=110982215&i=291073&d=861632
ORANGE JUICE: France Telecom announced it is to make an initial public
offering of up to 15 per cent of its mobile telecommunications
subsidiary Orange by the end of January. The French network operator
will use the IPO as a means of funding its $40 billion (42 billion
euro) acquisition of Orange, made last May. Institutional investors
will be granted two weeks to place orders before the general public
gets its first shot at the shares on 12 February, according to a
report in the French business newspaper Les Echos.
http://tm0.com/sbct.cgi?s=110982215&i=291073&d=861633
LESS ADVANTAGE: Incentive marketing firm AllAdvantage.com is pulling
the plug on the bulk of its European operations, laying off 15
employees and closing offices in Paris and Hamburg. Rather than
continue operating as a b-to-c incentive marketing firm, the company
has decided to forget the consumer altogether and instead concentrate
on licensing its back-end technology to other marketing firms.
http://tm0.com/sbct.cgi?s=110982215&i=291073&d=861634
SWEDES PULL TOGETHER: Swedish telco Telia, which failed to secure a 3G
licence in the auction last month, is forming a 50-50 joint venture
with one of the licence winners,Tele2, a subsidiary of Netcom. Telia
will have equal access to the licence awarded to Tele2 and the two
companies will the spread massive investment costs involved in
building a nation-wide UMTS network. Meanwhile, the company continues
to mount a legal challenge against the 16 December decision by the
regulator that failed to grant it a licence.
http://tm0.com/sbct.cgi?s=110982215&i=291073&d=861635
TOO MOBILE: Phone manufacturers have been urged to help develop ways
of protecting mobile users from street crime. The British government
has asked industry leaders to collaborate with police to drive down
crimes involving mobile phones. More than 15,000 mobile phones are
stolen every month in the UK, costing the industry more than 100
million pounds a year, according to the Federation of Communications
Services.
http://tm0.com/sbct.cgi?s=110982215&i=291073&d=861636
----------------------------------------------------------------------
BY THE NUMBERS
~~~~~~~~~~~~~~
British government figures for 1999-2000 show that mobile phones made
up 12 per cent of all stolen property.
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STAFF
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Written by James Price. Send news tips and press releases to
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