Telkom’s share price has continued its decline, bringing its drop since June 2019 to over 70%.
The company shares touched the R100 mark during 2019, but this was the last time Telkom peaked – and at the time of writing (9 January 2020) it had declined to R29.85 per share.
The graph below shows the rapid decline of Telkom’s share price over the past seven months.
Reasons for decline
Market analysts previously told MyBroadband that multiple factors have contributed to the fast rise and fall of Telkom’s share price.
Reuben Beelders, portfolio manager at Gryphon Asset Management, stated that certain investors got overly excited about Telkom’s cellphone business – which helped the share price increase.
“Telkom does not deliver a great return on equity – less than 10% – so I would not be rushing to buy the stock,” said Beelders at R42 per share in December 2019.
Cannon Asset Managers CE Adrian Saville said in December that Telkom’s share price had been pushed down due to concerns relating to corporate action, debt to build the mobile business, weak cash flow, and pressure on data prices.
He added that Telkom’s underlying property portfolio held through Gyro was often discounted, or even ignored.