Archive for the ‘The Guardian’ Category

Focus – Blackstar

Thursday, April 6th, 2000

It is what advisers might call “a brave decision,” which roughly translated means it appears a damn fool idea or at the very least, a risky one.

Undeterred by the tumble in internet shares, British online video retailer BlackStar.co.uk unveiled plans yesterday to float on the London stock market.

The company, which sells videos and DVD discs by mailorder on the internet said it planned to raise about £50m in new shares in the flotation and to go to the market in the final quarter of the year.

Co-founder Jeremy Glover said yesterday that he was undaunted by the sharp sell-off in hi-tech shares this week which saw the tech-heavy Masdaq dipping 13% at one point on Tuesday.

“A lot of re-adjustment has taken place in the market in the last month and it’s our view that that’s actually good for the market,” Mr Glover said. “We have always taken a long-term view of our market”.

The theory that the market is undergoing a giant winnowing process, which is sorting the internet wheat from the chaff is only comforting, of course, for firms who are convinced they will be one of the winners.

Yesterday Mr Glover was talking up BlackStar’s prospects of becoming a global leader in the $33bn global market for video and DVD sales.

But with BlackStar’s market share last year just .0075% of that, there is a long way to go. Mr Glover is forecasting sales this year of £15 to £20m.

In the cut-throat world of e-tail that may be easier to predict than to achieve.

BlackStar is likely to choose an adviser and broker in the next few weeks. Mr Glover’s two other co-founders, Tony Bowden and Darryl Collins, also own 16.5% each of the two year old firm.

Venture capitalists Atlas and Tarrant own about a third of BlackStar.

Staff options account for 15% of the diluted equity and minority shareholders own the rest.