MICROSOFT RESALE DEAL
EOH plunges as defence contract adds to its woes
The rough ride for EOH investors resumed on Monday as its shares plunged to their lowest level in eight years after a report that Microsoft’s decision to cut ties with the technology company was linked to a tip-off about a contract with SA’s defence department. EOH, whose market value has shrunk 88% since December 2016, partly on governance concerns, said last week the global computer giant was ending its resale partnership with the company for reasons that were not yet clear. The JSE-listed technology company’s share price slumped more than a quarter through the week, even though Microsoft’s move is only expected to dent profits by about R10m in the current financial year, equivalent to 3.5% of EOH’s profit from continuing operations in 2018. But the rout continued on Monday after TechCentral reported that Microsoft’s decision was related to an anonymous complaint to the US Securities and Exchange Commission about a R120m software deal between EOH and SA’s department of defence. EO...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.