More woe for Marconi
Published: 14 Aug 2001 11:42 BST
Shares in troubled telecoms equipment manufacturer Marconi fell on Tuesday morning after experts warned that the company was unlikely to stage a strong recovery in the near future.
Analysts at Goldman Sachs announced that they were maintaining their "market underperformer" recommendation on Marconi, They also more than halved the price at which they would advise buying Marconi shares to 55p, compared to an earlier price target of 120p. In a note to investors, the analysts warned that "we feel it [Marconi] is not nimble enough to compete against smaller, niche suppliers in the industry."
In response, Marconi's shares fell by over eight percent, and were trading at 74p at 10.30am, down around 7p. This compared to a high of over £12 less than a year ago.
There are widespread concerns that, six weeks after it suspended trading in its shares and issued a profits warning, Marconi may have more trouble ahead. Tuesday's Daily Telegraph warns that the company may well fail to achieve its predicted level of operating profits this year, as telecoms firms continue to rein in their spending on new infrastructure.
Marconi was slammed by investors for suspending its shares before announcing its profits warning, thus preventing them from avoiding some of their losses. Some experts believe that the company's only hope in the long-term is a takeover.
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