Hong Kong and mainland Internet companies have been warned that half would perish as the fund-raising door slams shut on a sector which investors were scrambling to get into just four months ago.
The warnings came as the stock market reacted to huge losses posted by Tom.com and the voluntary liquidation of online book seller Chinese Books Cyberstore.
The Internet-heavy Growth Enterprise Market (GEM) Index fell 3.35 per cent to 438.66 points, a fraction above its record low. The index has lost 56.13 per cent since launching in March, making it one of the world's worst-performing stock indices.
Portal operator 36.com, which debuted on Friday, plunged 22.22 per cent to 18.9 HK cents, while Tom.com lost 6.54 per cent to HK$5.
'I think at least half of the Internet companies in Hong Kong and China will not be able to survive in the near future,' said Chinadotcom chairman Raymond Ch'ien Kuo-fung.
'Internet companies, especially those vertical portals with narrow market niche . . . have got to be careful.'
