Further doubts were cast over the sales forecasts of UK Internet start-up, Display.IT, this week, after it denied Ross Perot was a backer of its major reseller.
Investor confidence in the supplier of financial forecasting software was damaged after it failed to disclose who was behind Alsina, the Luxembourg-registered reseller that Display.IT claims had placed an #11.5 million order for 920,000 workstation licences earlier this year. This amounts to 90 per cent of the firm?s total revenues.
Peter Levin, Display.IT?s founder and managing director, had attested that Ross Perot owned 20 per cent of Alsina, a claim that was subsequently denied by the US magnate's own company, Perot Systems. And today, Levin denied any such link.
The denial by Perot Systems had already led the company?s shares to crash by 40 per cent to 390 pence, losing a fifth of their value on the Ofex over the counter market.
Levin blamed the share collapse on stock speculators and issued a statement on Ofex saying he had bought 7,500 shares this week to demonstrate his confidence in the firm.
The Securities and Futures Authority, which regulates the UK securities market, is currently examining the unusual share movements in Display.IT?s share price.
The company said in a written statement: ?Levin states that neither he nor his family have any personal interest in Alsina and that information about its ownership will be disclosed to Display.IT?s auditors. Peter Levin states that Ross Perot has no direct connection with Alsina. Levin also reaffirms his sales projection of one million units, which appeared in a private placement memorandum issued last year.?
But the row has led to calls by Proshare, a private investors? organisation, for brokers to issue warnings to shareholders about the high risks involved when trading in shares quoted on Ofex.
Only experienced investors should become involved because JP Jenkins, the market maker, only quotes indicative prices and is not committed to trading them, claims Proshare. This can cause problems when a share price falls and investors are unable to sell.
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