Escom AG warned last Friday that far from the $30.5m loss it had been forecasting for 1995 only the previous week, the loss would be nearer $85m. The company blamed slow year-end sales in Germany and high start-up costs in the UK, but that cut no ice with the markets and the shares plunged 4.35 marks, or 27%, to 12 marks when trading resumed in Frankfurt on Friday. Escom simply went to its bankers for $27m and will raise another $40m in a rights issue. The sales turnaround in Germany and the worldwide drop in computer prices have continued through mid-February, Escom warned, echoing Compaq’s experience. Analysts said Escom would survive but that it had to go up-market with its product line to compete with the likes of Compaq, and not simply use price as the main sales pitch.
