Riverdeep will relinquish its listing on the US-based Nasdaq exchange in favour of a primary listing in Dublin and a possible listing in London.

The company said the voluntary delisting, which is to occur tomorrow, was designed to consolidate trading liquidity on one market.

A further stimulus is thought to have come from the volatility of the Nasdaq exchange, where Riverdeep has been the subject of much short trading in recent times.

Goodbody Stockbrokers analyst, Mr Gerry Hennigan, said that a delisting would be a "radical" response to a concern about volatile trading. He added that the company's share price was likely to remain volatile in the short term.

Since March 2000, Riverdeep has maintained a primary listing on the tech-heavy Nasdaq and a secondary listing in Dublin. The Nasdaq listing has historically been much more expensive to maintain.

Riverdeep chairman and chief executive officer, Mr Barry O'Callaghan, said the Irish exchange was the company's "domestic market", since all major share placings had been made there and the company's shareholder base was mostly European. More than 90 per cent of Riverdeep's shareholders are based in Europe.

Mr O'Callaghan said Riverdeep was a "misunderstood" company, that was now more akin to an established publishing house than "a dotcom business that went public" or a "volatile Nasdaq company".

According to Mr O'Callaghan, a primary Dublin listing, and possible new listing in London, will better suit the company's new profile. "We're gravitating towards the platform that we think will provide us with the opportunity to be better understood," he said last night. "In due course, we may even go back to the New York Stock Exchange."

Riverdeep took its Nasdaq listing at the height of the technology boom, floating at $66 per American Depositary Share (ADS), a unit equating to six ordinary shares. Yesterday, the ADS units were trading at $6.78.

Buying and selling of these units, which accounts for about 5 per cent of Riverdeep's share capital, will cease upon delisting.

Mr O'Callaghan said holders taking short positions in the stock were "unlikely" to continue such a practice in Dublin.

In what it calls a "courtesy" gesture, Riverdeep has undertaken to pay the fees attached to converting ADS holdings into ordinary shares.

Shares in Riverdeep gained 10 cents to close at €1.15 in Dublin last night.