Whisper it, but EOH bomb might have stopped ticking
Share price could have found a bottom at R10, still a very far cry from its heyday of R180 in July 2015
On Wednesday morning EOH notched up another notable performance on the stock market in what has been an implosion of Steinhoff-like proportions.
Shares in the IT services group dipped below R10 for the first time since December 31 2009. That they recovered to close above the psychologically crucial level may be the sign that some stock market vultures have been looking for: evidence of a bottom.
Of course it’s a far cry from EOH’s first move above R10 almost a decade ago, which began what would become an extraordinary upward climb for the share price, never marred by any major pullback. It culminated in EOH touching R180 in July 2015.
EOH’s woes have been well documented: allegations of improperly awarded contracts, the unsustainability of a growth strategy based on one acquisition after another, worries about declining cash flow, and the recent decision by US IT giant Microsoft to end its relationship with the company over an anonymous corruption complaint against EOH subsidiary EOH Mathombo.
The company has also seen the almost complete overhaul of its board and management several times over since founder Asher Bohbot first surprised the market with news of his resignation as CEO in 2017.
EOH has been sifting through all its public sector contracts and said on Wednesday that it expects its internal investigations to be wrapped up at the end of May.
Hopefully by then, and once and for all, Stephen van Coller and his newly installed FD Megan Pydigadu can get on with the business of running the business.