Getmobile slump sees value fall €32m

GETMOBILE shares dived nearly 40% yesterday as the Dublin stock exchange newcomer issued a profit warning just two months after floating.

Investors in the mobile phone company, which changed its name from Fitzwilliam Capital to coincide with the listing, were left €32 million poorer as a result.

Among the biggest losers was Pierce Casey, the venture capitalist who founded Fitzwilliam Capital and is now Getmobile chief executive, whose 5% stake in the company was worth €1.5m less at the close of trading.

The share price tumbled after the company told the stock exchange that a crucial deal with a German partner fell through. The deal, a major marketing campaign with TV channel Springer, was a key plank in the company’s selling strategy and was expected to account for at least 25,000 sales of mobile phone contracts - more than 10% of its target for the year.

There was further bad news from a joint venture with German rail operator Deutsche Bahn, expected to deliver 20,000 customers, reported disappointing progress. The rail deal offered customers a package containing a mobile phone and discount travel card but has so far failed to take off.

The company said the German market for bill-pay mobile phones, its core area, had seen “disruption” thanks to the entry of a number of new operators. Germany was also suffering weakened consumer spending and economic uncertainty caused by the recent general election.

“While Getmobile believes the impact of these factors is likely to be short lived, these factors will impact on sales,” the company told the stock exchange. It warned investors that postponement of sales expected from the Springer deal, coupled with German market conditions, would impact sales in the critical pre-Christmas period.

Yesterday’s slump dragged the share price from 89c to 55c, valuing the company at €52m. It was worth €88m when it floated in August.

A small number of investors escaped the effects of yesterday’s fall by offloading shares on Monday, when the share price slipped 6% in afternoon trading that saw 20,000 shares change hands - around 10 times the entire volume traded over the previous five days.

Getmobile also said it had started selling into the Dutch market and would target France next month.