Shares in online white-goods retailer AO.com soared over 40 per cent when it made its stock market debut this week (February 26), valuing the company at almost £1.6 billion, which is reportedly worth more than Argos-owner, Home Retail Group.
The offer price of 285p initially increased to more than 410p. At close of play yesterday, it was valued at 378p. However, some analysts said the high valuation was reminiscent of the dotcom boom in the late 1990s, which crashed when the bubble burst in 2001.
Speaking to The Guardian newspaper, Richard Holway, chairman of TechMarketView, said: “To apply such stratospheric tech valuations to an online retailer really is risking the infamous bursting of the bubble.”
Bolton born John Roberts left school without any qualifications and earned the nickname the ‘Kitchen King’ after creating household appliance website Appliances Online, 14 years ago, but recently rebranded it as AO.com.
The value of Roberts remaining 28.6% stake rocketed by £113million to around £458million – making the 40-year-old the equivalent of nearly £3,500 a second during the nine hours of trading and taking the total value of the company to within an inch of rival Dixons, which is reported to make some 15 times more in annual profits however.
AO.com has now become the UK’s largest online domestic appliance retailer, with a 24 per cent share of the market, and in addition to selling kitchen appliances from its website it also retails them for high street chains including Tesco, Argos, B&Q, Next, Debenhams and House of Fraser.