Could This Be Why Oando Shares Are Staging An Astonishing Comeback?

In case you missed it Oando shares just staged a remarkable comeback!! From going from N9 to N6 in under two weeks the share price has now gained a whopping 22.46% this Month alone. Oando as you may have guessed by now has posted the best return for the Month of November with no other stock coming close. Next to Oando is Guinness at about 14.5% as at Thursday, November 5 2015. Oando of course did this by gaining 8.68%, 7.22% and 5.44%  on Tuesday, Wednesday and Thursday respectively. This was after 7 straight days of losses. So what has actually changed?

No one really knows for sure but analysts inform Nairametrics that this rally could be either of two things. They cite a major shareholder of the company of Italian roots but with strong connection with the corridors of power in Nigeria as the likely source. The billionaire investor is even thought to own about 70% of Oando and may have seen this as an opportunity to solidify his strong hold of the company. Analysts also believe the Italian has been approached by management of the company for some form of bailout in the form of a financial lifeline. Nairametrics was unable to confirm these insinuations as these analysts refused to disclose their sources.

Several social media sources also suggest the rally could be as a result of the mooted planned debt deal the company is having with its local and foreign debtors. The company had said that it was in advanced stages with its creditors to refinance some of its debts giving the company a huge lease of liquidity. Some analysts had viewed Oando’s huge debt pile as a major snag in its bid to stay afloat after the record losses it incurred in the last four quarters.

Regardless of all this, shrewd analysts see this still as a bull trap and attribute the rally to “unforeseen forces” who trick investors into believing there is a rally on a stock thus sucking investors in and then dumping the stock on them at the top. Some call it the greater fool theory!