Former schoolteacher Mr Pat McDonagh's shareholding in Riverdeep, worth $951 million after the company's first day of trading on Thursday, had fallen in value to around $796 million when the Nasdaq exchange closed last night.

Dealers attributed the fall in New York to profit-taking, but some said they now expected the shares to come back to "more realistic levels" in coming weeks.

Riverdeep shares rose to touch a high of €12 in Dublin yesterday before closing at €9.75, up 55 cents on the day.

On the Nasdaq, where trading in the shares was more active, Riverdeep closed $10.60 down at $56.25. In volatile trading on its second day as a publicly quoted company, the shares moved in a range of $52.75 to $65.5. The shares opened some $8 down on Thursday's $66.9 close. In their first day on Nasdaq, the value of the shares rose by 235 per cent from the float price of $20.

Dealers described yesterday's rise in share price in Dublin as "a catch-up reaction" to the increase in the shares in New York on Thursday after the Dublin market had closed.

Every $1 fall in the share price reduces the value of Mr McDonagh's stake by about $14 million.