Mothers’ stocks fall below IPO

With Internet-related stocks falling both domestically and in the United States, all seven issues traded on the Tokyo Stock Exchange’s new market for young, fast-growing stocks, Mothers, have dropped below their initial public offering prices.

Internet Research Institute Inc. finished trading Friday at 10.59 million yen per share, down from its IPO price late last year of 11.7 million yen. It was the last of the seven stocks listed on Mothers to fall below its IPO.

IRI stock surged to 77.41 million yen in late January.

Created in November, Mothers, short for “Market of high-growth and emerging stocks,” is home to Internet-related stocks. As the number of shares issued by listed companies is limited, many of them saw their stock prices soar after listing because of investor expectations of high growth.

But the stocks have seen a steep decline recently as investors have started paying closer attention to the listed companies’ earnings.

For example, Crayfish Co. finished at an ask-only 9.41 million yen Friday, compared with its IPO price of 13.2 million yen.

Snova Corp. and Livin’ on the EDGE Co., both listed after March, have never risen above their IPO prices.

A brokerage official said investors should be aware of Mothers’ easy listing requirements and refrain from seeking quick returns on investment in stocks listed on the new market.