Blast-Off for British Telecom

The scramble at the London Stock Exchange last Monday resembled a rough-and-tumble rugby scrum. In the first day of trading in British Telecom, hundreds of brokers fought to get some of the action. The government of Prime Minister Margaret Thatcher was selling off 50.2% of the company as part of a program to return some nationalized firms to private ownership. Around trading posts adorned with yellow balloons and huge red, green and blue plastic model telephones, 800 million Telecom shares changed hands, a London record for one day's activity in a single stock.

The British government set the initial investment price at 50 pence (600). Investors will have to pay an additional 80 pence (960) in two installments over the next 16 months. On opening day, the share price surged from 50 pence to 93 pence, but then settled down to close the week at 92.5 pence. Telecom was also hot across the Atlantic. On the New York Stock Exchange, where the company's shares were traded in units equivalent to ten shares, the price jumped from $5.96 to $11 on Monday and closed at $11 on Friday. Because the government set its initial price so low, it will receive only $4.7 billion for Telecom shares that are now worth about $6.2 billion.