GlobalNetFinancial.com Inc, the Nasdaq-listed online financial portal, has announced that it has raised its stake in EO, a UK online investment service, from 8 per cent to 29.9 per cent, whilst UBS Warburg has taken a smaller stake of 3 per cent.
EO is an investment service which, via its web site, allows private investors to buy shares in new issues from brokers. Once the order is completed, EO will automatically enter the shares into Crest, its electronic trading system, so an investor can deal immediately trading begins. EO's chief executive John St John said 'The internet provides the ability for the first time for issuers to appeal directly to retail investors where before the physical constraints of retail were too great.' He said retail investors would be on the same footing as institutions, which make a significant return on the new issues market.
EO is expanding to meet growing retail demand and is currently valued at around £50m, having last week raised £6m in a financing round, although there are no immediate plans for the company to float on the stock market.
As far as UBS Warburg's 3 per cent stake is concerned, the deal will allow UBS to channel a number of its new issues through EO. UBS Warburg also has an option to acquire further shares. Moreover, EO is in talks with other financial institutions about similar deals.
Stanley Hollander, chief executive of Globalnetfinancial, said: 'The consumer has been a forgotten person in Europe.' He said that the "lastminute.com debacle" was a good example of where retail investors had to wait too long before they could trade their shares.
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