Memory shares continued their slide last week, ending at 130p on Friday, 25p down on the week, in the fall-out from US giant Intel's decision late last year to slash the price of computer memory.
That makes a 240p fall since Memory broke the news of the collapse in computer chip prices nine days ago, together with nearly doubled losses of pounds 1.95m last year. The slump has wiped pounds 140m off the value of the firm, once the biggest on the fledgling Alternative Investment Market.
Memory investors - many of whom bought shares at 420p in a pounds 5m placing only last October - are extremely angry at the dive and the runaway hype previously surrounding the firm.
At least one is now writing to the Stock Exchange to complain that Memory should have warned shareholders earlier.
Cameron McColl, Memory's president and chief executive, denied bid talks with Syntaq: "The reality is we're two businesses in the same market. We talk to each other from time to time. There's nothing in it," he said.
Industry sources confirm, however, that Memory directors met Syntaq managing director David Armstrong only last week, the latest in a series of talks, which have involved technical due diligence by both sides.
Mr Armstrong delined to comment, but sources say Syntaq has been considering a flotation in London or on New York's Nasdaq over-the-counter market this year.
The market uncertainty has led Memory to drop its own Nasdaq plans and its rival may be similarly affected.
Both Memory and Syntaq buy defective microchips and mount them on boards incorporating fault-finding technology. These are then sold on to computer manufacturers. Syntaq, whose technology is different, has a link-up with Hyundai of Korea and is thought to have made profits last year.
On flotation in December 1994, Memory's prospectus said it was not aware of any rival capable of "successfully competing" with it, even though Syntaq started production in April 1994.
Mr McColl explained this by saying that he did not know Syntaq had a product that worked at the time.