The Dimension Data share price, hammered by rumours, fell to R14.75 on the JSE yesterday before regaining some of its losses to close at R16, which was 5% lower than Wednesday`s close.
The share price, already hard hit by a trading update issued by the group on 3 July - interpreted by the market as a profit warning - fell victim to talk that a further profit warning is imminent.
There was also talk in the market that there would be resignations at board level, although DiData has denied this and other rumours.
Despite strong denials from EDS that it is in talks to acquire DiData, there is still speculation that EDS may be looking to buy up some parts of DiData.
Earlier this week Susie Sutherland, marketing director of EDS in SA, said the local operation had received a call from the international parent company to put a stop to the rumour.
She admitted that certain DiData divisions would make a logical fit with EDS, but stressed that EDS is not in any form of acquisitions talks with DiData.
Analysts say that, rumours aside, the share was also under pressure from general global weakness in IT stocks.
One analyst says he would not like to speculate on where the DiData share will turn around, but he does not believe it has not bottomed yet.
"I would not buy it just yet. It could well fall some more, whether this month or next month, I don`t know. I`d recommend it more for the medium- to long-term, but not short-term yet."
He believes the share will turn around because the group still has a great deal of fundamental value. "But I wouldn`t like to call it right now," he adds.
The group has said that it expects its full-year financial results to show a decline of one to two percentage points in operating margins as a result of pressure in its products-dependent businesses.
It is in the process of moving towards a more service-oriented business model.
The share, which traded between R15.10 and R15.75 this morning, was trading 45c or 2.81% down at R15.55 by 11.19am.
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