Marconi drops even further; everyone suffers
Seems folk ain't too happy
Marconi's shares are continuing to fall this morning. Down 4.5 per cent to 107.5p - the lowest for 20 years and then by 11am down to 104p. Shareholders are furious and are calling for the head of CEO Lord Simpson and his deputy John Mayo.
Not only this but Marconi's fall has had a knock-on effect across the whole market (it finally closed down 54 per cent yesterday). The FTSE 100 index has fallen to its lowest level since April, also bringing down the Dow Jones and Nasdaq. This was in part due to AMD's profit warning but there is a general cloud over technology stocks and it has caused across-the-board drops.
Logica is down 8.4 per cent, Sage 5.3 per cent, Invensys down 4.6 per cent; Fujitsu 3.3 per cent; Hitachi 3.5 per cent; Sony 4.5 per cent and on and on.
Marconi's fall from grace is drawing parallels with BT. Investors are now asking for a Vallance-style management sacrifice and a possible rights issue. John Mayo may be the Bonfield character in this that survives but with credibility dashed.
Ironically though, BT may bring Marconi down still further as it announces it will reduce spending as part of its ongoing recovery plans. This means the company will not get anywhere near the £860 million BT spent with it last year - just under 15 per cent of its total sales. ®