The company blames short-seller investors – those who sell
shares in a company in the hope of buying them back at a lower
price – accusing them of trying to manipulate the market.
According to reports, the fax entitled "Running on Empty" began
circulating in the City last week, alleging that the on-line
retailer was running out of cash.
It had an immediate impact, causing the price of shares in
Lastminute.com to fall by around 7%. The share price had previously
risen, following the company's report on 11th February that it had
suffered only a £1.8 million loss in the last three months of 2004,
instead of an anticipated £4 million loss.
Company CEO Brent Hoberman confirmed that the rumours contained
in the fax were inaccurate and that the incident had been reported
to the financial regulator.
"It is another case of market abuse where people are profiting
from wrong information," he told the BBC.
He added that the company has existing cash reserves of £30
million, and an unused £20 million overdraft facility.
