Egg floatation? Warm reception from analysts
Published: 30 Jul 1999 16:57 BST
It is thought the Prudential may try to cash-in on current enthusiasm for Internet stocks illustrated by Freeserve's market evaluation last week.
Lance Close, senior analyst at Mintel research, believes this could be an unwise move for Prudential. "Egg will undoubtedly be oversubscribed," he says. "But those in the know will have severe reservations. Egg has basically bought market share with incredibly low interest rates, but they will have to increase them to make a profit by 2001 as they say they will. I think in the long run it would be better for them to keep ownership than simply jump on Freeserve's bandwagon."
Close also claims Internet stocks themselves could suffer as a result of floating Egg. He says, "One day one of these companies is going to have a nightmare. When the hype is over people will start looking at companies' real return and there won't be anything there."
However Prudential does not seem to be too concerned about the risks of floating Egg. One spokesperson, not afraid of the odd cliché says, "Prudential is a broad shouldered organisation and has many strings to its bow. Basically, the sky's the limit."
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