Dot-com darlings set for relegation shame

More former high-flyers are set to be demoted - and this time they aren't even worth enough to be included in the FTSE All-Share Index
Written by Graeme Wearden, Contributor

The continuing slump in the technology sector means that several big-name firms may soon be evicted from the UK's main index of listed companies.

Many financial experts are convinced that, barring a late and unlikely rally in their share prices, QXL, Scoot.com and software designer Izodia will all drop out of the FTSE All-Share Index after a review on Wednesday. Some analysts believe that the 365 Corporation and Durlacher, the investment bank, are also in danger of being pushed into the FTSE Fledgling index.

This would be considered a humiliation for companies that once were among the highest-valued on the stock market, as the FTSE All-Share is designed to include the top 99 percent of the total value of the UK market.

The Daily Telegraph predicts that companies will need to be valued in excess of around £45m to qualify for the FTSE All-Share. Any current index member currently worth at least 15 percent less -- £38m -- will be relegated.

At £20m, QXL is tipped as a racing certainty for the plunge, as is £10m-valued Scoot.com and the 365 Corporation, worth £16m.

Firms that drop out of the All-Share index could experience a resulting decline in their share price. According to The Independent, companies in the Fledgling index are much less likely to attract the attention of fund managers.

Members of the FTSE International, which sets the indexes, are meeting on Wednesday. Any changes will take place on 21 December. The FTSE International will also be deciding which companies should make up the prestigious FTSE 100 -- the index of the UK's 100 most highly valued listed companies.

See techTrader for the latest financial news in the high-tech sector.

Have your say instantly, and see what others have said. Click on the TalkBack button and go to the techTrader forum

Let the editors know what you think in the Mailroom. And read other letters.

Editorial standards