The sight of investors dumping shares worth millions of pounds as they desperately scramble for cover is rare enough in the sober surrounds of the Dublin Stock Exchange.

However, more and more Irish companies are falling victim to just such behaviour on foot of their decision to list, not at home or in London, but on the more volatile Nasdaq index in the US.

Saville Systems is just the latest Irish high-tech firm to see its share price plunge after it told investors on Wednesday that it expected a first-quarter loss because of a shortfall in new licence sales.

Earlier this month, shares in Iona Technol ogies plummeted by more than 50 per cent after the company announced that first quarter earnings would also fall short of projections. Other Irish companies punished for disappointing the market include Irish clinical research company ICON and CBT whose share price was decimated last year, collapsing from more than $60 (#65) to just above $6 after the company admitted it would not meet Wall Street forecasts. The presence on the Nasdaq register of "momentum investors", who invest in a stock as long as it maintains a strong upward movement but dump the shares as soon as they run out of steam, ensures that the share price reaction to any company setback is severe. In addition, there are a lot of private investors taking a punt on Nasdaq shares - many of these investors trade over the internet, allowing them to get in and out of stocks quickly.

So why do young Irish hi-tech companies continue to aspire to a Nasdaq listing despite the obvious downside when things go wrong?

"The multiple is one of the biggest reasons for companies to go to the Nasdaq. You can get a far more attractive P/E ratio by going to the US market," says Ms Gemma Houlihan, technology analyst with ABN AMRO.

The price/earnings or P/E ratio, the share price divided by a company's earnings per share, is a measure of a firm's earning power and is one of the most important ratios in determining the investment value of a company and thus the price at which it floats and trades. Companies on the Nasdaq tend to enjoy far higher p/e ratios than firms listed in Europe because investors look to future profits when putting a value on the firm.

Increasingly, they also take into account factors such as embedded value, product value and market share rather than just next year's earnings.

As a result, firms which have yet to make a penny in profits enjoy a share price undreamt of at home.

Ms Houlihan says that typically companies can be guaranteed at least double the multiple they would get in Europe on the Nasdaq.

But in many ways, the Nasdaq is a doubleedged sword - its very attractions are what make it so unforgiving when a company's fortunes change.

So which companies are best suited to making a go of the Nasdaq and what alternatives face those reluctant to take the risk?

Mr Tom O'Connor of management consultants Prospectus believes that Irish firms need to have a good product, not just be service providers, before considering a Nasdaq listing. A strong management team, good corporate governance and good investor relations are also prerequisites as is a good international customer base.

"What the Nasdaq wants is quarter on quarter growth and to deliver that, a company needs a good product to continue to develop and grow."

Young firms that do not meet these exacting criteria have plenty of other options, many of them less costly, less risky and less hassle.

"High-growth private Irish technology companies have a far greater range of funding alternatives than in the past," says Mr Garrett Hickey, chief executive of corporate advisers Technology Investment and Underwriting (TIU).

Trade sales and mergers are just two ways for companies to realise value - among those to have taken these routes in recent times are Euristix, which was bought by the US group Fore Systems for £58 million, while Baltimore Technologies opted for a merger with Zergo.

Other avenues facing high-tech firms are to source funds from the growing numbers of local and international venture capital firms, many of whom are able to offer partnerships, alliances or distribution link-ups with other firms in which they have invested. A strategic partnership with one of the multinational technology firms, some of which are increasingly investing in smaller start-up firms, may be another option.

A dual listing may also be a solution for some companies as floating in Dublin or London provides companies with an institutional investor base more likely to take a long-term view as well as the advantages of the Nasdaq.

Observers if the corporate scene in technology sector say the options facing firms are increasing with Frankfurt's Neuer Markt for growth stocks and France's Nouveau Marche Among the markets now open to young Irish companies keen to go public.