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EOH Holdings Limited sell-off: touching base

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EOH-Microsoft-stock-price

EOH Holdings Limited (EOH)

Riddled with dodgy Government deals, EOH, once the golden child of the market has lost its lustre over the last couple of years. Former CEO and Chair, Asher Bohbot would also resign from the board, effective 28 February 2019 as the share price continues to move lower.


To make things worse for the IT giant, it also lost the contract to be a Microsoft software licence reseller in March. EOH stated that Microsoft did not provide any reason for terminating its contract with EOH Mthombo, a subsidiary of EOH. It was later rumoured it was also due to a questionable defence contract.

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Chart life

Looking at the line chart below we can see the abrupt sell-off when the dealings came to light which sent the share price has been in free fall. The EOH stock is down over 90% from it’s highs at 16812c per share and with the latest trading statement it might see some more downward pressure.


EOH-chart-priceSource - Bloomberg 

Take away from the Trading Statement:
In accordance with section 3.4 (b) of the JSE Listings Requirements, shareholders are advised that the financial results for the Group for the six-month period ended 31 January 2019 (the “H1 2019”) will differ by more than 20% from that of the previous corresponding period.

Take note: the next earnings date for EOH Holdings Limited (EOH) is scheduled for the 16th of April 2019 and more volatility might be expected on the stock. 

Read: InvestSure protection in recent events

 

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Barry is a market analyst with GT247, with a wealth of experience in the investment markets. Now in his tenth year in the markets, Barry "The Beef" Dumas brings a combination of technical analysis and fundamental insights to the table. 

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