Dixons invests pounds 9m in online trader
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Your support makes all the difference.FREESERVE, THE free Internet service provider owned by the retailer Dixons, yesterday advanced its plans to launch online trading this summer by lifting its stake in the US firm GlobalNet Financial.com Inc.
A spokeswoman for Freeserve said the purpose of the $15m (pounds 9.4m) investment was to acquire GlobalNet's expertise in online share trading, already a booming business in the US where many amateur traders manage their own pensions over the Internet. Freeserve exercised options to purchase two million GlobalNet shares, trading yesterday at $4, for $1 and bought a further 6.4m in the market at around $2, to give it a 13 per cent stake.
GlobalNet is already a partner in Freeserve's online financial information site, UK-iNvest.com, which allows browsers to plot share price movements and construct virtual investment portfolios. Freeserve has the option to increase its stake in the $210m company to 19.9 per cent over the next 30 months. Analysts said Freeserve was unlikely to mount a bid for the group.
Dixons' shares have come off their April high of 1,594p following the establishment of rival free Internet service providers and America Online Inc's decision to cut subscription charges. Yesterday they gained 68p to close at 1,266p. Some analysts calculate that Freeserve accounts for 700p of the share price.
Nick Bubb, retail analyst a SG Securities, said: "We have been excited about Freeserve's online trading for some time and this deal puts it in focus. It will give Freeserve another content advantage which will strengthen consumer loyalty.
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