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Telkom shares rocket over 21%

After last week’s sell-off.

Shares in Telkom have rocketed more than 21% since reaching a multi-year low in intraday trading last Thursday, signalling that investors believe the sell-off was overdone.

The share price climbed to as high as R35.78 on Monday morning in Johannesburg, and were last seen up 6.4% at R34.84. The rally comes on top of an almost 10% surge in its share price on Friday.

Last Thursday, Telkom shares plunged to just R29.42 apiece in intraday trading on the JSE, its lowest level in more than six years.

Telkom’s share price went on a roller-coaster ride in 2019, briefly touching an all-time high above R100/share by mid-year before a punishing sell-off in the second half that saw two-thirds of its value wiped out.Traders believe a big seller was depressing the price.

The sell-off was relentless, and accelerated after the group published its interim results in November and then pursued — and failed to bag — a deal to buy rival Cell C.

Late last year, Cell C signed a comprehensive expanded roaming agreement with MTN South Africa, with the latter expected, in effect, to manage the former’s network. This is likely to reduce Cell C’s capital expenditure requirements meaningfully and, coupled with a planned upcoming recapitalisation from the Buffet Consortium and other investors, could put it on a sounder financial footing and potentially turn it into a stronger competitor — to Telkom’s possible detriment.  — (c) 2020 NewsCentral Media

This article was first published on TechCentral here and republished with permission

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Fair value for Telkom is in the range R38 to R40.
High in 2019 was about R98.
I predict by year end the price will be R32.
The company is in rapid decline, alienating its customers en masse, and is being run by an idiot.

Cosatu works in underhanded ways in order to intimidate. This applies to everything it does. It is so radical that it will rather collapse an industry than compromise on demands. It operates within the ANC alliance in a similar manner.

Were there no further developments since November regarding the Cell C takeover?

The creditors of Cell C brought in an international investment bank and law firm to help effect the takeover by Telkom, which the creditors want.

If the shareholders of Cell C does not play ball, Cell C can be put in business rescue by the creditors.

A takeover would help Cell C, Telkom, the creditors, jobs will be saved, competition would be enhanced and the PIC, who has shares in both, will benefit.

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