Traders blamed the fall on fears that computer-related companies
were overvalued and on prospects of further interest rate rises.
The companies which suffered the biggest losses in share value
included Intel, Cisco and Microsoft.
One analyst said, “No one wants to commit to technology because
every time they do they are getting their fingers blown off.”
In the UK, the low value of the high profile LastMinute.com and
the collapses of Boo.com last week and subsequetly Net Imperative
have contributed to a nervousness about internet company shares.
The ramification for a small business could be that it becomes more
difficult to find funding.
Egg, the internet banking arm of Prudential, the UK insurance
company, has postponed its initial public offering, following a
fall in UK technology shares in the UK.
Prudential had planned today to issue an indicative price range
for the shares. However, Goldman Sachs, the advisers, decided it
was impossible to set the price given the current volatility of the
market for technology shares. “You couldn’t choose a worse week to
float,” said one Egg adviser.
Prudential’s announcement follows Yes TV, the UK video on demand
company, aborting on Saturday its plans to float for £560
million.
