Tandon Stock Drops 25% After Report That Loss Is Coming

Tandon’s stock slipped 25% on heavy volume in the past two days of trading, after the company’s unexpected announcement Friday that it will post a significant loss for the third quarter that ended June 29 and suffer further losses through at least December.

The Chatsworth computer products company’s stock closed Monday at $3.37 1/2 in over-the-counter trading, on volume of nearly 1.5 million shares. The price was down $.12 1/2 from Friday’s closing price and $1.22 1/2 from its close on Thursday, before the announcement was made. The stock has fallen nearly 33% since last Monday, when it was trading at $5 a share.

Investors Surprised

Securities analysts said investors were surprised by the announcement, especially because it came just one month after the company’s highly publicized introduction of its Tandon-brand computers in New York.

Besides disclosing that it expects to post losses, Tandon also announced last week that it will permanently eliminate 225 jobs by closing its disk-drive manufacturing plant in San Jose and will furlough 270 computer production employees in Thousand Oaks and Simi Valley for up to six weeks.

The company, which is scaling down its disk-drive manufacturing and stepping up its production of personal computers, said it has taken longer than expected to set up a marketing network for its computers.