TECH FIRMS: Shares in e-learning company SmartForce plunged 22 US cents to an all-time low of $3.93 (€4.15) on the Nasdaq yesterday, just two days after a merger designed to restore investor confidence.The struggling firm's stock recovered slightly to finish trading at $3.96, 4.58 per cent below previous close

.The stock was among three Irish tech firms to take a hammering on the New York and London markets, with educational software firm Riverdeep and chip-designer Parthus also struggling amid continuing concern about the sector's prospects.

With analysts questioning revenues projected for the "definitive" link-up between SmartForce and its US counterpart SkillSoft, there was no sign that the deal had secured the support of investors.

The share was trading at less than 10 per cent of its 12-month $41.22 high.

According to SmartForce's chief executive Mr Greg Priest, "The market is confused about the deal and it is reacting negatively to it."

He would have expected a better reception, he said, but there were "various ways" in which US regulations affected intrepretations of the merger.

"As you explain those to them, they tend to get comfortable," he said.

Mr Priest did not anticipate that the share price fall meant the company would become a takeover target in its own right before the merger with SkillSoft was concluded.

The company had a "poison pill" defensive device that would make a hostile takeover "very dilutive" for an acquirer.

In addition, the merger agreement allowed each party to take 20 per cent of the other in the event of a rival bid emerging for either.

In further bad news for the Irish e-learning sector, Riverdeep lost $1.47 in the early Nasdaq trading after a broker downgrade. By lunchtime in New York, the stock was 96 cents weaker at $16.01 after hitting $15.50. The share lost ground after Piper Jaffray cut its rating to "outperform" from "strong buy" amid doubt about the level of federal support for educational budgets.

Riverdeep's founder and 24 per cent shareholder, Mr Pat McDonagh, was once a principal in SmartForce, the former CBT Systems.

Shares in the chip-designer Parthus fell 7.55 per cent to close at 25p on the London exchange.

The drop followed the departure of semiconductor intellectual property firm ARM Holdings from the key FTSE-100 index and a note by Davy broker Mr Barry Dixon which said news in the sector gave "little cause for optimism".