Memory shares dip further

Shares in Memory Corp, the AIM-listed microchip repairer, continued their slide yesterday, on investor fears of a sharp decline in profits, writes Mathew Horsman.

From a high of 555p last September, the shares plunged to 135p at one point yesterday, recovering modestly to close at 142p, down 13p on the day. The drop follows a single-week rout of 215p last week, as the shares appeared to be in free-fall.

The drop has infuriated investors who subscribed to a placement of 1.2 million shares at 420p last autumn, just before a computer-chip price war was launched by US giant Intel. Prices for chips have dropped by 60 per cent since then.

Memory Corp was relentless promoted as a one of AIM's clear success stories: a high-tech stock with a clear market niche. Floated in 1994 at 45p, it joined AIM in September last year.

The Scottish-based company buys defective chips, repairs them and creates refurbished boards for computer manufacturers. It had initially estimated the value of the market by 2000 to be pounds 20bn, but that is sure to drop.

Memory also suffered production delays that affected results in 1995. That year, the company posted a loss of pounds 1.95m.

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