Viglen says shares are undervalued

Viglen Technology?s company secretary has claimed that its market value is an unfair assessment after shares in the direct manufacturer traded at lower than the opening price.

The company floated on the UK Stock Exchange on 4 August after its demerger from Amstrad plc (PC Dealer, 6 August). But first-day trading proved disappointing as stock moved at lower than expected share prices.

According to the company, it had too many shares on the market, which kept the price down. Amstrad chairman Alan Sugar?s decision to keep his 35 per cent stake in Viglen until the share price improves is also thought to have kept the price low.

Viglen stock was introduced at 72.5p per share, but fell eight points to 64.5p, closing on 8 August at 61.5p. The company has 122 million shares trading and a market capitalisation of #75 million.

Viglen Technology company secretary Mike Ray felt there was an imbalance of sellers to buyers in the market. He said: ?There are a high number of shareholders left over from the Amstrad era that may want to sell them on, but when a large investor like Sugar suddenly decides to hold on to his shares, it cannot but have an effect on the share price.?

Ray claimed Viglen?s market value was an unfair assessment compared with other companies. ?For a company that made #11 million profit last year, this [62 pence] is a low value,? he said.

Meanwhile, disk drive vendor Seagate is lodging an appeal against the High Court?s decision to award Amstrad #86 million damages for the supply of faulty drives eight years ago.