Virtuality races to 119p premium: Frantic dealing in a limited stock

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The Independent Online
SHARES in Virtuality, the maker of virtual reality computer games, which was launched on the stock market yesterday, raced to a 119p premium amid frantic dealing. At one stage the shares, placed at 170p, reached 308p in what one dealer said was 'a hell of a lot of trading for a limited amount of stock'.

A company spokesman defended the low striking price, arguing that shares in Virtuality were always going to be difficult to set. 'We knew that the demand would be there at 170p.'

The company, founded in 1987, makes equipment and software that enables someone wearing a headset to experience a computer-generated three-dimensional environment. Virtual reality (VR) systems have become a youth craze in America and Japan.

Initial sellers were those who benefited from the placing of the 7.4 million shares, 28.4 per cent of the company. At least two institutions are thought to have bought into the company, including Eagle Star, which is believed to have purchased 250,000 shares. American traders entered the market in the afternoon. Virtuality has forecast a pounds 400,000 loss for this year after heavy R&D expenditure. Tom Elliott, of Greig Middleton, forecast a pounds 700,000 profit for next year with 2.6p of earnings.

Virtuality has so far sold 350 of its VR units to arcades and theme parks. It is developing a new generation of computer graphics, which Mr Elliott believes will improve demand for the company's systems.