Thursday, August 16, 2012

1608: Buyers shares World Online compensated after 12 years


It took ten years to reach a settlement and one-and-a-half year to pay out, but finally the buyers of shares in World Online (WOL) will be paid out 47 euro per share, this includes the original buying price and rent.
The IPO of WOL is still the example of the Dutch internet hypes of the turn of the century. The Dutch railways which had provided her with an existing network, the broadcast company TROS and the telecom company Telfort invested large sums of money in the company. The company should eventually become the largest internet provider of Europe.   ABN AMRO Bank was the advisor to the company together with Goldman Sachs.

Buyers of World Online shares at the launch on March 17, 2000 get finally 110 per cent back for the shares bought at 43 euro per share at the launch. On March 17, 2000 the shares rose to 50 euro per share, but at the end of the day the shares were worth 43,20 euro per share. And five days later the shares went down to under 30 euro per share.

The downfall was due to the news that the founder and chairperson of WOL Nina Brink had sold her shares for 6 dollar a share (roughly 5 euro at that time).  Despite the knowledge of the launching banks this fact was not clearly mentioned in the portfolio by the banks Goldman Sachs and ABN AMRO. Some 150.000 buyers of shares lost  3 billion euro, according to the Dutch Investors Association.


Half a year after the IPO WOL was acquired by the Italian provider Tiscali for a meagre 5,9 billion euro, while the company was worth 12 billion on the day of the introduction.
(© 2000 Bert Driessen) The settlement and final payment will end a long trail of court cases and negotiations. In 2007 the association already received a favourite ruling, but it was not considered good enough. By November 2009 the banks ABN AMRO (the launching unit is now part of the Royal Bank of Scotland) and Goldman Sachs admitted that they had given a too prosperous picture of the value of WOL and settled.

In 2010 a settlement of 11 million euro was reached for the 12.000 investors who started a class action led by the Dutch Inventors Association. Another 5.000 investors were represented by the Consumer Claim. 
Much to the chagrin of the investors, Nina Brink is no partner in the settlement. The banks were held responsible for the lack of essential information about the shares sold by Nina Brink.

1 comment:

AdamHvidt said...

It is really nice to find this - to me - new overview/wrap-up on the rotten IPO of World Online way back. Shame on the First Lady.
I was then a new graduate, working in the danish part of World Online, a distinguished danish ISP called Image of Scandinavia bought by World Online in the madness of dot.com-expansion. Sometimes I visited the headquarters in Holland experiencing a wild level of bling and luxoury and what seemed to me to be a twisted sense of reality and business moral, some people in the organization in a crazy bonanza of spending money on anything attractive. "Buy it" was the mantra, and huge amounts of money were spend on what seems now to be nothing.
Looking back I learned this: If something looks like a scam - it usually is. But then again - this is already several bubbles back in history.