Shares of Wang Laboratories continued to fall yesterday in heavy trading as rumors swirled that its fourth-quarter earnings report would be further delayed, that its financial relationship with IBM was souring and that it might file for bankruptcy soon.
The company's class B shares lost more than half their value, falling 87.5 cents, to 75 cents. It was the most active issue on the American Stock Exchange. The close represented a new low for the company and came in the wake of another low of $1.625 set Friday.
The decline means the shares of the battered computer company based in Lowell, Mass., have lost nearly two-thirds of their market value in two trading days.
Bloomberg Business News reported that a former president of the company, John F. Cunningham, had said his contacts within the company predicted that Wang would file for protection under Chapter 11 of the federal Bankruptcy Code this morning. He said the company's board met yesterday afternoon.
A spokesman for Wang, Ed Pignone, declined to comment on the possibility of a bankruptcy filing.
"That is rumor and speculation, and we do not comment on rumor and speculation," he said. He said the company's fourth-quarter earnings figures were still being computed, but said they would be released "soon." Most analysts have predicted that they will show a substantial loss.
The Wall Street Journal yesterday quoted an unnamed "IBM insider" as saying Wang would not receive an additional $75 million investment by International Business Machines Corp. because it had not sold as much IBM equipment as originally anticipated.
Wang and IBM announced an agreement in June of last year under which Wang would sell several IBM computer systems under its own label. As part of the agreement, IBM invested $25 million in the cash-short company and said it would pump in as much as $75 million more if certain conditions were met.
A spokesman for IBM, Paul Neuman, said the company would not comment directly on the report. He said the industry giant looked forward to continuing its relationship with Wang.
There have been recurring rumors that the company would file for Chapter 11 bankruptcy protection.