QXL taps the market for £40m

QXL.com, Europe's largest online auction company, yesterday tapped the market for £40.3m and saw its shares soar to an all-time high.

QXL.com, Europe's largest online auction company, yesterday tapped the market for £40.3m and saw its shares soar to an all-time high.

The company raised the money for marketing purposes and to back investment in technology and acquisitions.

Analysts said that the company was seeking to use the funds raised to bolster its scale within the internet auctions sector, which is seen as the key ingredient of success in the field.

They added that the price of the placing was regarded by investors as an endorsement of the soaraway value of the shares.

The company placed 2.5 million shares with institutions through Credit Suisse First Boston - a total of about 2.2 per cent of its share capital - at 1,610p a share. QXL's shares jumped by 11.5 per cent to close at 1,822.5p yesterday. The shares were listed in October at just 195p.

"While the company has not budgeted specific amounts for acquisitions or investments, from time to time the company evaluates potential acquisitions and strategic investments and anticipates continuing to make such evaluations," the company said in a statement.

QXL's losses are increasing because it is investing money campaigns to attract users to its website as it competes with rival online auctioneers such as EBay, Yahoo! and Germany's Ricardo.de, stock analysts said.