Fresh doubts about investing in the social media sector emerged yesterday after Jellybook, a shell company set up by Jonathan Rowland, slumped to a maiden loss of £300,000.
Mr Rowland said Jellybook had made no investments since its stock market debut last year because valuations are too high and he has "refused to overpay".
He is "confident that we will be able to identify one or more suitable transactions reasonably quickly".
That still left shareholders in the red as Jellybook racked up costs of more than £1m on its listing.
Investors have lost almost 60 per cent of their money as the share price has crashed from its 10p debut in June to 4.375p last night, slashing Jellybook's stock market value from £17m to £7m.
However, the results also reveal that several companies associated with Mr Rowland have benefited. Jellybook paid £327,500 to Banque Havilland, of which Mr Rowland is a director, and £50,000 to Colegate Management Ltd, in which he is involved. Banque Havilland worked as underwriter and joint bookrunner on the Jellybook float.
Jellybook is headquartered in the tax haven of Bermuda, despite being listed on the London stock market.
Mr Rowland, who has been known to grant interviews to journalists on board his yacht in Monaco, founded another dot.com company, Jellyworks, whose shares soared and then slumped in 2000, when it was delisted. Mr Rowland also planned a telecoms investment firm in 2007, but returned cash to shareholders because of the credit crunch.
He launched Jellybook last year as "the first publicly traded company dedicated to investing in the high-growth European social media sector". But his wariness about making an investment would seem to be justified given the experience of Facebook, whose shares fell more than 15 per cent since their debut 10 days ago.
Mr Rowland said Jellybook did look at one potential acquisition which was "sufficiently appealing as to warrant the engagement of professional advisers in order to conduct due diligence", but negotiations collapsed because of "a disconnect" between Jellybook and the vendor.
Jellybook shares rose 0.325p to 4.375p yesterday.Reuse content