Shares of Oando Plc dropped below N6 for the first time in over 5 years, as investors continue to react to its latest earnings. However, unlike last week when the share price dropped 9% everyday, it closed nearly flat on Monday losing just 0.33%.
For shareholders who spoke to Nairametrics on condition of anonymity, this might not be so much of good news as it is bad. Mike (not the real name) who spoke to us, said he bought the share at about N20 hoping that the share price will rise once again to N30. Mike had hoped that the ConocoPhillips acquisition would still ensure that the company churn out profits regardless of the drop in the price of oil. After all, Seplat was still posting profits although the profit was declining. They still paid dividends.
Mike also opined that Oando had a knack for trading on technicalities and would get another bump if the results turn out better than he had even thought. However, when the share price started to drop back in June he held back hoping the price could once again rise. The share price dropped further in August to under N10, putting him under pressure to sell. But, when he figured he would be losing nearly 50% of his value he decided to hang on. Things seemed upbeat initially as the share price started to rise sometime in September, hitting a peak of about N11.90. Unfortunately the share price never recovered beyond that price as it started to fall dropping to as low as N9 before the results were announced. Mike looks back and regrets not selling early enough. His biggest quagmire however is whether to sell or just wait out the storm. After all, he who is down fears no fall.
Lucy (real name withheld), another shareholder, informed Nairametrics that she bought the shares on the day the results was announced and was now weighing up her options on whether to buy, sell, or hold. Asked why she bought the stock in the first place, she said when she saw the share price trading at N9 it looked to her like a huge bargain. In the previous months, she had seen Oando trade at N18. She also remembered the stock rising from N9 to N30 during the year-long negotiation for the COP deal. Her plans however went awry when she saw online later in that evening that Oando had reported a massive loss in its full year results. She couldn’t believe how she could have made such a huge “mistake”. If only she had not checked out stocks on that fateful morning she would not have fallen into the “trap”, she tells Nairametrics. She decides she will have no choice but to sell and cut her losses as she wasn’t looking to wait it out. A loss of this magnitude is too much for her to wait out considering how long it could take before she gets dividends.
Oga, where is the analysis on these anecdotes? It would appear that everything related here will be apparent from a look at the stock price profile, along with the volumes traded. So?