Speculation about a big deal between Lanica, run by 31-year-old dealmaker Andrew Regan, and privately owned Littlewoods, the Liverpool-based pools and department store group, sent the share price soaring from 137p to as high as 2050p in the past three months.
But in an after-hours statement issued to the Stock Exchange, Lanica said it knew of no reason for the substantial increase in its share price in recent months.
It added: "Lanica has managed and will continue to manage its investment portfolio in accordance with the listing rules in respect of investment companies and in accordance with the investment policy set out in the offer document for the company."
Lanica cannot invest more than 20 per cent of its gross assets in any one investment, the statement continued.
Last night shares in Lanica closed 125p lower at 1550p, still way above the 203p per share paid by Mr Regan when he took control late last year. They have been on the slide for more than a week since Littlewoods denied rumours of an important link, worth up to pounds 1bn, with Lanica.
Littlewoods was said to be interested in reversing its mail order and high street businesses into Lanica to gain a stock market listing.
Instead Littlewoods revealed it was discussing a small deal to supply Lanica with goods and infrastructure for a mail order business due to be launched for the armed forces.
Earlier this week Littlewoods paid pounds 390m to buy the Freemans mail order business from Sears, the Selfridges-to-shoes group.
Mr Regan, son of Roger, the company doctor at kitchen and bathrooms group Spring Ram, paid pounds 4.06m in cash for New Guernsey after mounting an unsolicited bid last October. The company was later renamed Lanica Trust.
He made his name using a vehicle called Hobsons to buy the Co-Op's food manufacturing arm.
Hobsons was then sold to Hillsdown Holdings for pounds 121m in 1995.
At Lanica, Mr Regan has already clinched a mail order deal with Naafi, the armed forces' trading company, to sell non-food items to almost 250,000 service personnel.