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First internet stock wave IPO launches on to stock market

By Aimee McClinchy

Friday 31st March 2000

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The first internet stock listed on the main board of the Stock Exchange this week with half a dozen others hard on its heels.

Beauty Direct's IPO listed at 25c on Wednesday, traded to a high of 32c on turnover of 800,000 shares and closed the day at 26c as it spearheaded what is, compared with overseas markets, an as yet tiny e-wave.

The local offerings of only half a dozen stocks, with at least one other listing in EstarOnline in the next few weeks, pales in comparison to the US.

There it is estimated as many as 100 online business-to-business commerce firms alone will go public in the next 18 months, with six B2B companies already holding IPOs this year, Goldman Sachs said. But only a handful would survive, it predicted.

Australia has also already seen a number of internet stocks introduced, along with share price hype. Some industry veterans warn the local market here does not have enough scale for the huge growth needed for dot.coms. Others warn the dot.coms have unrealistic plans.

But EstarOnline managing director Matthew Darby said his company, which made history last year when it was the first internet stock to list on the secondary board, was one stock which had worked to prove itself and its technology before it went to the market.

"We've made sure we're set up right, we are not some shell company that has turned to e-commerce. We are set up as a proper business to try to take the 'dot.com' [image] out of it."

He points to independent reports which listed EstarOnline as a strong buy ahead of its investment prospectus being released.

MoneyOnline has already become the first company to trade its shares online without a broker, adding a homegrown touch to one of the first IPOs.

Industry whispers add at least four other companies planning to IPO this year with most looking to the Australian Stock Exchange.

They include Strathmore Group's investment Commsoft, biotech company Genesis Research & Development and Walker Wireless.

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