The telecommunications equipment maker Telspec crashed 242p to 513p after Frank Hackett-Jones, the chairman, told shareholders that profits in the first half of 1996 would be hit by delayed sales. Shares in the AIM-listed microchip repairer Memory suffered a similar fate, closing down 37p at 133p yesterday to test an all-time low of 130p, on news that sales of computer memory chips aimed at Apple and the bottom end of personal computer markets had been disappointing.
The profit warnings are likely to infuriate investors in both companies.
Mr Hackett-Jones raised almost pounds 15m when he sold two million shares at 772p last September, while Memory has had a torrid time since the heavily promoted shares were placed by Manchester broker Henry Cooke Lumsden at 420p last autumn - just before US giant Intel launched a price war in the computer chip market.
Prices have since fallen by over 60 per cent to a level some observers feel is permanent.
Telspec warned in February that contracts for products worth pounds 6m had been delayed. Last month it unveiled 1995 pre-tax profits of pounds 8.7m - pounds 1.5m below market expectations. It now says some high-margin sales have been deferred to the second half.
Slower-than-expected trading in the Middle East and Asia/Pacific and problems with raw material purchasing were also blamed.
The run of bad news has tarnished Telspec's reputation as one of the brightest new issues of 1994. The shares were placed with institutional investors at 160p and rose steadily to peak at pounds 10 in November.
Loss-making Memory's warning of possible stock write-downs was its second in a little over a month and followed a string of disappointments, including production delays and missed profit targets which have raised doubts in the industry over whether it will ever make any money.
The Scottish-based company buys defective chips, repairs them and creates refurbished boards for computer manufacturers.
It initially estimated the value of its market at pounds 20bn by the year 2000, but last year posted a nearly-doubled pounds 1.95m loss.
The collapse has left many in the City with egg on their faces. Back in January the broker UBS tipped the shares to go to pounds 10 by 1998, forecasting profits of pounds 16m this year. That, and Henry Cooke Lumsden's pounds 20m estimate, have now been torn up.
A month later, Cameron McColl, Memory's president and chief executive officer, gave an upbeat presentation to UBS clients following a distribution deal with Sumitomo of Japan.