After just 90 days in the London Stock Exchange's top flight - the FTSE 100 - Psion, Baltimore Technologies, Thus and Kingston Communications have crashed out of the list.
The exit of the high-profile stocks follows falls that have wiped close to 40 per cent off technology stocks on the London market in the last three months.
Every three months the FTSE 100 is tweaked so it contains the 100 biggest London-floated firms by market capitalisation - the current price of all the shares in a company.
In March, the time of the four technology companies' promotion, rules were changed so that companies with less than a quarter of their stock available to the public qualified to be listed as FTSE 100 firms. Also, the stock benefited from the way new economy firms are valued.
Many received high values of market capitalisation based on future promise, not historical earnings.
Psion, for example, received a market capitalisation in March of £4.7bn, despite making only £3.3m in pre-tax profit. Its value was largely based on the Symbian operating system, which it co-developed for portable devices, and it earned a reputation as one of the biggest threats to Microsoft.
At the time, analysts warned that the companies' stay in the stock exchange's biggest 100 firms could be shortlived, and now the firm's share prices may suffer as a result of dropping out. This is because they will also drop out of the portfolios of investment funds that automatically track the FTSE 100, creating an artificially high number of sellers on the market.
Analysts say that the falls in market valuation can be attributed to a substantial shakeout among all technology stocks rather than a reflection of the four firms' individual performances.
"Many technology stocks have what I'd call creative valuations and that makes them extremely volatile," said analyst Richard Holway.
"As a whole, tech stocks are still too high and they really don't benefit from these high valuations. Our own indices of tech stocks have fallen by 40 per cent since March and the FTSE TechMark's much the same. I think we can expect them to drop further," he added.
The dropped tech stocks will be replaced by Hanson, Scottish & Newcastle, Ocean Group and Bookham Technology.
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