While its shares have recovered some ground over the last two days, they have traded as low as 440p this week, down from a high of 869p at the beginning of March.
Tarrant, who has been hosting the Capital breakfast show for 16 years, will see his £1m contract expire at the end of December, although he must do some work for Capital until the end of 2003.
According to analysts, his departure could hit Capital's revenues -- already hurt by the decline in advertising -- by as much as 3%.
Capital has the biggest share (48%) of Londoners aged between 15 and 24 years old. Overall, it has a 10.3% share of the London audience, but this rises to 12% during Tarrant's 6am to 10am show.
In May, Capital Radio reported that revenue on a like-for-like basis fell by 7% to £60m, and pre-tax profits fell 56% to £9.4m.
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