Rightmove "bubble"

[New Bear]

Sorry if I have missed this over the weekend but last Friday the Times featured a short article on the Rightmove floatation, describing it as a "bubble" and likening it to the dotcom collapse. You certainly wouldn't be encouraged to buy if you read the piece.

[Guest Riser]

Sorry if I have missed this over the weekend but last Friday the Times featured a short article on the Rightmove floatation, describing it as a "bubble" and likening it to the dotcom collapse. You certainly wouldn't be encouraged to buy if you read the piece.

Here's the link:

Strong investor demand is no measure of how the share price will perform. Just look at last months QinetiQ float. Private Investors were allocated a maximum of around 700 shares £1400 whether they requested £5000 or £50,000 worth of IPO stock at the float price of £2. After an initial surge to £2.20 the stock is now trading below the offer price.

. . . but Rightmove bubbles

INVESTOR demand yesterday prompted Rightmove, Britain’s leading property website, to raise its flotation price range by about 10 per cent in a move reminiscent of the excitement of the dot-com boom.

The company, which claims to have three-quarters of all property website traffic in the UK, now believes it is worth somewhere between £349 million and £425 million, or 275p to 335p a share. The mid-point is £387 million, up from £352 million previously.

It is many years since the price was raised on an internet float, the most memorable example being lastminute.com, which listed at the height of the dot-com boom. After the initial period of trading, the price never recovered.

[Bingley Bloke]

This is most amusing. Imagine if everyone had started to get excited about dotcoms when they'd already peaked, as opposed to when they were soaring... that's what this is akin to. I certainly won't be investing in RightMove though if my spread-betting company offers a contract on them I'll be fancying a short!