EOH’s shares slip to nine-year low
The loss of its Microsoft reselling contract has seen EOH stock lose nearly two thirds of its value so far in 2019
EOH’s shares have slumped to their lowest level in nearly nine years as the market comes to terms with the loss of its Microsoft contract.
The stock dipped another 4% on Thursday morning to R10.79 before recovering slightly to R11.03, the worst level since August 2010.
On Monday, EOH confirmed that US tech giant Microsoft has officially terminated its contract with the company, which is probing its past bids for state projects due to concerns about its dealings with various government departments.
The stock has now lost nearly two thirds of its value so far in 2019, extending the heavy losses incurred in the two previous calendar years.
In late 2016, EOH’s shares were trading above R170.
Microsoft SA served EOH’s subsidiary, EOH Mthombo, with a cancellation notice in February after an anonymous corruption complaint. EOH hired a forensics team to look into the matter and has since suspended or received resignations from those implicated, new CEO Stephen van Coller said in a letter to staff in February.
Van Coller had hoped that after meeting with the software giant, it could save its reselling contract.
EOH said on Monday the loss of the Microsoft partnership would dent pre-tax profits by R30m.