The latest company to cause Wall Street gamblers to take leave of their senses is Comparator Systems Corp, a Newport Beach, California start-up with under $500,000 in annual sales. It has been a start-up for 20 years, has 29 employees, including part-time consultants – and hasn’t been able to make its payroll for 11 of the past 13 years, often paying out shares instead of cash, which explains why it has 605 million outstanding. It has only $4,000 in the bank, no manufacturing plants, and its only property is a leased 5,900-square-foot office in Newport Beach. Yet on the back of hopes that its product, a $3,000 fingerprint-matching system intended to enable banks and airlines to confirm identities, in development since 1988, may be picked up by a big credit card company, the shares took off last Friday, rocketing to $1.88 from a mere 6.25 cents the previous night, before settling at 88 cents, at which level it is valued at $500m. Yesterday, trading in the shares was suspended at the overnight close of 37.5 cents, at which point the company was still valued at $226.8m, and representatives for Nasdaq were planning to visit the company.
