On Monday its shares fell 82p; yesterday they lost a further 44p to 208p. Since the shares were floated two years ago at 65p they have touched 447p as the group was recognised as a potentially significant player in the hi-tech revolution.
But high-flying shares do not tolerate unexpected trading disappointments. Hence the market's savage reaction.
The group said it would lose £2.5m in its first quarter against an expected £1.8m loss, itself a surprising figure as far as the market was concerned.
The statement prompted the company's stockbroker, Albert E Sharp, to slash its profit estimates from £10m to £2m.
But George Grey, chief executive, described Sharp's new figure and the share slump as an "over-correction". He said: "The prospects for the company over the next 12 to 18 months remain very strong".
In the meantime there are signs that any share with a computer involvement is in danger of catching the Tadpole complaint. Telspec fell 15p to 364p; Virtuality 10p to 247p and Division 5p to 110p. McDonnell Information Systems, which has already tormented the market, lost 3p to 75p and even Filtronic, involved in mobile telephone components, failed to hold an early gain, ending 8p lower at 198p.
The rest of the market failed to hang on to Monday's enthusiasm. The Japanese earthquake prompted fears that bonds could weaken if funds were called back to Tokyo. But leading UK insurers are unlikely to be badly hit. Commercial Union, Royal Insurance and Sun Alliance suffered modest falls.
Willis Corroon, the insurance broker slipped to 148p despite talk of stake building.
Grand Metropolitan was a significant feature as its $600m convertible loan note offer was expanded to $710m and the interest rate fixed at a higher than expected 6.5 per cent. In unofficial dealings the notes traded just above par.
The 6.5 per cent coupon unsettled Grand Met shares, down 14p at 372p, a 12-month low. A 6 million deal at 379p prompted speculation that one leading securities house had cashed in shares to buy the notes. Negative comments from Kleinwort Benson also unsettled sentiment.
Saatchi & Saatchi's rally continued with a 7p gain to 118p; the shipbuilder VSEL was another to continue recent progress, gaining 14p to 1,450p as hopes grew that bid action will resume soon.
Forte, down 4p at 245p, was hit by NatWest Securities caution and Kingfisher and Marks & Spencer gave ground ahead of expected Christmas trading statements.
Argyll, the Safeway supermarket chain, edged forward 2.5p to 271.5p as the Hanson takeover story continued to hold support. Morgan Stanley thinks the shares are a buy on trading considerations.
It points out that the group is in the middle of a "major distruptive overhaul" and many of the criticisms being made are reminiscent of comments made about Tesco two years ago.
Even without any bid, Morgan's Nick Bubb and Peter Brockwell believe Argyll's shares could be 335p at the end of the year.
A Beckman, a textile group, jumped 8p to 46p as almost 15 per cent of the capital changed hands through an agency cross at 45p. After the market closed it was disclosed that Maurice Lawson, chairman, had lifted his interest to 23.2 per cent.
It is unclear who sold. There are a number of large shareholders including the managing director, Alan Beckman, who recently completed a tax-efficient bed and breakfast transaction at around 30p.
Market Report The FT-SE 100 index fell 22.3 points to 3,054.4 and the supporting FT-SE 250 index lost 7.3 to 3,466.6. Government stocks flipped up by about £1/4.
Dealings in Starmin, the old quarry group, are expected to resume today following a rescue reconstruction.The shares were suspended at 0.75p. A £5.78m fund-raising operation, including disposals, has cut gearing from more than 400 to 66 per cent. Stuart Larnder, ex-Seven Trent, is the new chief executive. The group, now Water Hall, looks a sitting duck for a shell operation.
CCI, Britain's leading maker of clay pigeons, should arrive on the backwater 4.2 share market early next month. It has already raised its minmum £500,000 subscription and hopes to pull in a total of £800,000 by offering shares, subject to EIS relief, at 100p. The clay pigeon business, producing more than 100 million a year, was at one time part of Expedier, now the Ticketing Group.Reuse content