British community site and ISP Themutual.net has fallen victim to the dot gone feeling in the City.

Last July the co-operative promised shares to all members as an incentive for people to join its service.

The first 1,000 to sign up were offered 10,000 shares, while the next 490,000 will get 1,000 shares. Punters were told that the 10,000 share package would be worth at least £520 on flotation, and the 1,000 package £52.

But the company's flotation flopped last week, with shares trading at 0.75 pence on the opening day. This made a batch of 10,000 shares worth just £75. Today the price was down to 0.62 pence - bringing 10,000 shares down to £62.

If you were unlucky enough to join up later and get just 1,000 shares your stake will be worth £6.20.

Simon Wajcenberg, MD of themutual.net, said the market wasn't playing fair and described themutual's current share price as "ridiculous".

Previous statements from the company promising untold riches for those signing up were "based on market conditions at the time," said Wajcenberg. "The sentiment for Internet stocks is nothing like what it was."

The stock market currently values themutual at around £200 per head - it has 117,000 members - which is "clearly an undervaluation", he said. "This is an incorrect value. The market will realise this given time - and the value will go up."

Wajcenberg said the company was seeing a 30 per cent growth rate in user uptake per month, and would be in profit within the next 12 months.

And his advice to Themutual members who rushed to sign up but are now sitting on a shareholding they would make a loss on if they tried to sell? (£6.50 of shares will cost at least £10 in selling fees)

"They've got to bear with us - this is an opportunity for the public to take a stake in a company for free," he said. "A thousand shares at today's share price is not worth a lot of money. Although they might be worth a lot in the future."

Themutual has a limit of 13 million members, who have to agree to be spammed to be eligible for their free shares. ®