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Thursday, 18 November, 1999, 10:24 GMT
Europe's top net stock
Latin America is seen as having strong growth potential

Spanish internet firm Terra Networks saw its shares treble on its market debut - propelling it to the head of the list of Europe's leading cyber stocks.

Terra, a spin-off of telecoms group Telefonica de Espana, raised a total of $818m in offerings on New York's technology dominated Nasdaq stock market and in Spain.

"What we plan to do is to fund expansion in markets where we operate," said chief financial officer Antonio de Esteban.

The money raised would go toward marketing and obtaining content for its internet portals, as it aims to dominate the Spanish speaking online world.

By the close of its first day's trading Terra was worth $9.7bn.

The company offers internet access and content to Spanish and Portuguese-speaking markets in Latin America, Spain and the US.

Latin American quadrupling

Its offering was priced at $13.41, above its expected range after the deal was heavily over-subscribed.

Investors are betting that the soaring internet valuations seen in the US are about to be repeated in other countries.

The stock market debuts of firms such as Terra are seen by many American investors as a second chance for those who missed out on the US rises.

In the past year Terra has increased its number of clients to nearly one million by snapping up access and portal firms across Latin America in a $600m spending spree.

Major drive

"It is the largest Spanish/Latino internet company," said Steve Harmon, chief executive of e-harmon, an investment and advisory firm.

"It's a major drive by an established consortium of players who want to address the burgeoning Hispanic global internet market."

Another US analyst said: "I do believe the growth of international ISPs is a trend. We are clearly seeing internet usage explode around the world in the way we have seen in the last couple years here."

Unlike other European internet service companies - such as the 2.5bn valued Freeserve - Terra is focusing its strategy beyond its home markets, targeting Latin America.

It estimates that the number of Latin American internet users is set to rise to 34 million in 2000 from an estimated 8.5 million in 1998, giving the region faster growth than much of the rest of the world.

"We aim to look for the best local content in each market and have the best local partners. One key for success is being very local," said Rafael Bonnelly, Terra's director of content.

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See also:
16 Nov 99 |  The Company File
Freeserve shares surge
10 Nov 99 |  The Company File
UPS shares jump 30%

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