There was further evidence of fund managers' increasingly selective approach to technology flotations yesterday as Netstore, a so-called application service provider (ASP), revealed its market capitalisation on floating next Wednesday would be 37 per cent lower than first indicated.
While Netstore's share placing with institutions raised £40m as intended, Dresdner Kleinwort Benson, the company's brokers had to place more shares at a lower price than originally envisaged. Netstore will float at 150p per share, valuing it at £133m, £77m less than planned when the float was announced on 6 March. The scaling back has negative implications for forthcoming new issues, such as Yes TV, the video on demand company touring the City this week.
One fund manager, who attended a Yes TV presentation, said: "Given the current market volatility, Yes won't go at the top of the range. Investors are questioning what to pay for technology stocks whose revenues are some way off."
Netstore hosts software on its servers, doing away with the need to install it on desktop PCs. It is in partnership with Microsoft.