Shares in Marconi plunged by over 50 per cent on the London Stock Exchange today as investors slashed their valuation of the company after it released a profit warning late yesterday.
The telecoms equipment maker's stock fell 53 per cent to a low of 115p in heavy volume of 86 million shares.
Investors, frustrated at their inability to trade the share yesterday when it was suspended ahead of the announcement, sought to reduce holdings in Marconi and the battered tech sector in general.
"There is nothing to say that the shares could not fall below one pound . . . although we believe fair value is 150 pence," said one London equity dealer.
Dealers said trading in the stock would remain highly volatile. Fair value for the company, which yesterday warned that operating profits would halve and it would cut another 4,000 jobs, was seen to be between 89 and 170 pence a share.
Last month Nortel Networks shocked the market when it warned of a huge second-quarter loss and announced sweeping job cuts.
"Marconi is not as bad as Nortel but it is bad enough," said another dealer.