Freeserve shares drop below offer price

Despite being massively over-subscribed when it floated in July, Freeserve's shares fell yesterday below their offer price. From a starting point of 150p in July, Freeserve soared to the dizzy heights of 244p in early August, but at one point yesterday dropped to 135p. While some pundits are heralding this as the beginning of the end for the markets' love affair with all things Net-related, more realistic causes for the price fall could be found in concerns over Freeserve's ability to hang on to its newly-found customers. After shaking the market up when it launched its free Net access service, Freeserve has witnessed more than 100 free ISPs enter the market. Perhaps the most significant of which has been AOL's Netscape Online. When it launched, Freeserve claimed it would woo customers from AOL and others in droves. But the launch of the free Netscape Online service has seen Freeserve customers turn tail and sign up with AOL's subsidiary. This is not the first time the Net stock bubble was supposedly about to burst and it probably won't be the last either. ®