World Online International N.V.

Published 08 Jan 2001
Reference 4915
Industry Banking
Region Europe
Summary

The IPO of World Online on the Amsterdam Stock Exchange in the spring of 2000 triggered one of the most embarrassing stock market debacles in recent years, related to a transfer of ownership stakes by the firm’s CEO just prior to the offering and at a fraction of the offering price. Questions were raised about the conduct of the management of the firm, its board, the Amsterdam Stock Exchange, and the underwriting banks and about the implications for the future of European financial markets themselves.

Teaching objectives

Assessment of proper standards for initial public offerings, especially related to technology stocks, and the conduct of all parties to such transactions. What is adequate disclosure, especially in the case of shares to be distributed widely to retail investors? Does meeting the technical constraints imposed by the regulators necessarily suffice? Appreciation of risks faced by firms engaged as financial intermediaries in such transactions from a reputational point of view.

Keywords
  • RD0501
  • AR2001