Ten shares that went from hero to zero

After bringing you the shares that could have made you a millionaire, Times Money takes a look at some stocks that did the exact opposite.

These are the companies that destroyed wealth at a fantastic rate: the heroes that went to zero.

1. Maxwell Communication Corporation.

During the late 1980s and early 1990s this company, formerly known as BPCC, was one of the world's largest media groups. But the sudden and mysterious death of Robert Maxwell, its founder and chairman, who was found floating near his yacht in November 1991, triggered an examination of the company's finances, which were found to be in a disastrous state. It turned out that the company was insolvent and did not have enough money to repay its creditors, let alone shareholders.

The fall and rise of Robert Maxwell, 1983

2. Polly Peck.

Asil Nadir, a flamboyant Turkish Cypriot entrepreneur, took a controlling stake in the former textile company in 1980. Over the next 10 years he built up a conglomerate that was worth £1.7 billion at its peak, with a hand in everything from fruit and vegetables to electronics.
The alarm bells started ringing in 1990 after the Serious Fraud Office mounted a raid on one of Nadir's companies. The share price collapsed and dealing in Polly Peck shares was suspended in September 1990 and the Polly Peck Group was placed in administration in 1991. Asil Nadir left the UK while still facing charges of theft and false accounting and took refuge in Northern Cyprus.

Tempus: Polly Peck, February 1985

3. Marconi

Formerly known as GEC when it was a pillar of British industry, Marconi moved sharply away from the "safe and steady" route it had taken under the late Lord Weinstock and started to involve itself in more speculative technology investments as the dot.com bubble gathered pace in the late 1990s.

In September 2001 Lord Simpson, Marconi's chief executive, revealed that the company had lost hundreds of millions of pounds in the space of a few months. Marconi shares, worth more than £12 at one point, lost 99 per cent of their previous value, leaving investors virtually penniless.

Obituary: Marconi, master of wireless development, 1937

4. British & Commonwealth

This former stock market star, which encompassed everything from shipping to financial services, was brought down by an unwise acquisition.

In 1988 B&C bought Atlantic Computers, only to find, a year later, that it was leaking money at an alarming rate. Despite writing off more than £550m and putting Atlantic into receivership in 1990, B&C was not able to save itself and threw in the sponge a few months later.

First AGM of the British & Commonwealth Shipping Company Limited, 1956

5. Coloroll

Another casualty of the early 1990s, Coloroll, the furnishings business, had been a beneficiary of the consumer boom of the eighties, but, like B&C, came unstuck partly through an unwise purchase. In this case it was the acquisition of John Crowther, a textile business, in 1988.

The purchase proved costly and this, together with the onset of the recession and the collapse in the housing market at the end of the 1980s, led to Coloroll calling in the receiver in 1990. By a strange coincidence both Coloroll's chairman, John Ashcroft, and B&C's chief executive, John Gunn, had won the Guardian Young Businessman of the Year award.

Flowery future for wallpaper, 1981

6. Enron

The collapse of this US energy giant sent shock waves through America. In just 15 years the company had grown to become the seventh-largest in the US and Kenneth Lay, the company’s chairman, was a personal friend of President Bush. When it filed for Chapter 11 bankruptcy in December 2001 it triggered a major re-examination of the creative accounting techniques which had enabled it to exaggerate its profits and disguise its debts.

7. Boo.com

A classic victim of the bursting of the dot.com bubble, Boo.com was originally set up to sell fashion clothing over the internet. However after burning up vast amounts of cash and suffering big problems with its website, Boo.com was placed in receivership in May 2000.

8. Northern Rock

This former building society floated as a public company back in 1997. For some years its aggressive business model pleased investors. However, its heavy reliance on funding from the money markets, rather than retail savers, led to a spectacular collapse last year when the credit crunch started to bite.

Its share price plunged from a high of more than £12 to just 90p this February, before trading in the shares was suspended after the Government took the company into temporary private ownership. It is not certain how much money, if any, shareholders will receive in compensation.

Save safe with Northern Rock, 1980

9. Jarvis

The company is involved in building and maintenance work for the rail networks but its profits have been hit hard by cost overruns. Over the past ten years the value of its shares has fallen by 99.8 per cent.

10. Millwall Holdings

"No one likes us - we don't care" is the favoured chant of Millwall supporters, but it might equally be applied to the shares of the football club. The club was floated as a public company back in 1989, with many supporters showing their loyalty by buying a few shares. However their loyalty has not been rewarded. Over the past 10 years the club's shares have fallen in value by 98 per cent.

Millwall level with 30-year-old record, 1966

By Mark Atherton

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Comments

[David]

How about future bankcrupts, UKplc?

[celso - london]

How about Energis? That was a good rip off!!

[Simon]

Worldcom must feature as a great boom to bust. Built up via a series of acquisitions by Bernie Ebbers a former bouncer and evangelical convert, it fell when it was discovered that a simple accounting fraud whereby expenses were simply capitalised (both debit entries in accounting) to make the business appear profitable with ever helpful and too closely aligned lending banks making up the cashflow shortfall with increasingly large bank facilities which ensured they got a piece of the4 action on Worldcom's latest M&A deal. If ever there was a lesson for less cronyism and better external analysis by investors in US business this was it.

[olly]

bre-x !!!

Bre-X Minerals Ltd., a member of the Bre-X group of companies, was a junior Canadian mining company, based in Calgary, that was once reported to be sitting on an enormous gold deposit at Busang, Indonesia (on Borneo). Bre-X bought the Busang site in March 1993 and in October 1995 announced significant amounts of gold had been discovered, sending its stock price soaring. Originally a penny stock, its stock price reached a peak at CAD $286.50 on the Toronto Stock Exchange (TSX), with a total capitalization of over CAD $6 billion.

Busang's gold resource was estimated by Bre-X's independent consulting company, Kilborn Engineering, (a division of SNC-Lavalin of Montreal) to be approximately 70 million ounces. Reports of resource estimates of up to 200 million ounces were never made by Bre-X though the property was described as having this potential. Bre-X's gold resource at Busang was a massive fraud. Encouraging gold values were intersected in many drill-holes and the project received a positive technical assessment by Kilborn. Crushed core samples had been falsified by salting with gold that has a wide variety of characteristics that had been subjected to mineralogical examination by Bre-X's consultants. The salting of crushed core samples with placer or supergene gold constitutes the most elaborate fraud in the history of mining. In 1997, Bre-X collapsed and its shares became worthless in one of the biggest stock scandals in Canadian history, and the biggest mining scandal of all time.

[olly]

what about bre-x ? come on !!!

Bre-X Minerals Ltd., a member of the Bre-X group of companies, was a junior Canadian mining company, based in Calgary, that was once reported to be sitting on an enormous gold deposit at Busang, Indonesia (on Borneo). Bre-X bought the Busang site in March 1993 and in October 1995 announced significant amounts of gold had been discovered, sending its stock price soaring. Originally a penny stock, its stock price reached a peak at CAD $286.50 on the Toronto Stock Exchange (TSX), with a total capitalization of over CAD $6 billion.

Busang's gold resource was estimated by Bre-X's independent consulting company, Kilborn Engineering, (a division of SNC-Lavalin of Montreal) to be approximately 70 million ounces. Reports of resource estimates of up to 200 million ounces were never made by Bre-X though the property was described as having this potential. Bre-X's gold resource at Busang was a massive fraud. Encouraging gold values were intersected in many drill-holes and the project received a positive technical assessment by Kilborn. Crushed core samples had been falsified by salting with gold that has a wide variety of characteristics that had been subjected to mineralogical examination by Bre-X's consultants. The salting of crushed core samples with placer or supergene gold constitutes the most elaborate fraud in the history of mining. In 1997, Bre-X collapsed and its shares became worthless in one of the biggest stock scandals in Canadian history, and the biggest mining scandal of all time.

[Adrian]

What about Baltimore, Scoot, Atlantic telecom which were all ramped by Paul Kavanagh of Killik and Co on Bloomberg?

[R.Smitheringale]

Perhaps one of the biggest rises and fall was N.X.T.the speaker makers , do to the Daily Mirror pushing them through the City Slickers. They went to around £25 a share and are now about 20p I think.

[Stu]

I'm surprised that ENERGIS is not among this lot. From £40 to zero in a few months.

[Balwant Munglani]

I lost my life savings on British Energy!! Now the Govt is benficiary and few other clever sods.

[Ashley Pomeroy]

"For as long as I can remember, the Times website has been unable to display correctly certain characters, such as the apostrophe" - this is a character encoding issue. The article is encoded in UTF-8, but your browser is reading it as Windows-1252 or something similar. You can fix it by going to e.g. view - character encoding - and then picking UTF-8, at least if you're running Seamonkey.

[ian]

Independent Insurance was another one of those gems!!

[Ciaran Byrne]

For as long as I can remember, the Times website has been unable to display correctly certain characters, such as the apostrophe. Surely a world-class new organisation can find time to address this issue.

Two examples from this article alone are "...£1.7 billion..." and "...Marconi’s chief executive...". It is an embarrassment.

Massive bankruptcies like Bear Sterns, Parmalat and Worldcom aren't here. Why? And then there's Europe's most notorious virtual bankruptcy, Eurotunnel.

[Chris]

Can't beleive you left out baltimore technology - or Bre-X for that matter They may Milwall holdings look like mild profit warning

[Daniel]

Since Boo.com never actually floated on the markets, it's a little lazy to put it in a list of worst performing shares

[AG]

Commerce One - Nearly $1000 per share to out of business in 3 or 4 years

[james]

What about the traders/gamblers who always seem to MAKE money? Oh I know, they get theirs in hell. So does that mean the ones being punished now by losing, will go to heaven? You better be nice to them Rory; you'll be spending a long time together.

[Rory]

investing in shares is a sort of gambling whic the bible says is a sin. If sinners lose their money it is all part of their punishment

[tony]

and as Leeds United fans will tell you (without the bubble of a huge share price) LEEDS SPORTING plc was always a dud. Also how about Oxygen Holdings plc. I think they might be in th league of Millwall

[Barrie Harrop]

photo-me would have to be rated if one checked through the history of this stock.

[Toby]

Re Enron - the aside linking Kenneth Lay to GW Bush is irrelevant and misleaduing (but oh so predictable). Enron collapsed very early in the Bush administration due to practices in which it engaged during Clinton's term.

[Rod Dalitz]

You left out British Energy, a promising and seemingly rock-solid long-term prospect which went to around £5 and then dropped to 6p by January 2003. Now it is reborn, but the original investors have no benefit.