The Dimension Data share dipped below the R30 mark in volatile trade yesterday, but the company`s management remains unmoved by the drop, which has taken the counter to its lowest point since November 1999.
Malcolm Rutherford, DiData group financial director, says his main concern is for his staff members who have share options in the company.
"We work on a three-year option scheme, so our staff are in it for the long-term. I think they realise the company has an underlying value and that the fundamentals are good."
Rutherford says he does not see DiData dropping out of the FTSE 100 either, despite the drop on that bourse as well, now trading at 2.65, well down from the post-listing honeymoon late last year.
Merrill Lynch analyst Gordon Taylor says DiData should be more concerned as the counter is shedding value and it may experience this for some time.
"I`m not surprised [Rutherford] didn`t show much reaction. You need a steady hand at the helm," says Taylor.
"I don`t see anything in the tech sector as whole changing any time soon, including DiData. This is a market operating on fear and uncertainty, and I don`t see a recovery for the next six to nine months, but I do see the R30 mark to be psychological.
"There might be a short-term rally if investors believe counters to be oversold, but the results of the structural changes in the tech sector will take a while to wash out of the markets," says Taylor.
Rutherford says the perception within the market of DiData`s reliance on Cisco is overstated, adding that Cisco is very exposed to telcos and DiData isn`t.
"We will not be putting out a profit warning," says Rutherford.
Taylor agrees: "DiData has roughly a 20% exposure to telcos but this is mainly in the South African and Eastern markets, and it`s the US and European markets which have seen the biggest telecom slowdown."
Taylor says this is largely due to a cut back in expenditure after enormously expensive third-generation licence pitches.
The DiData share pulled back today, reaching R32 around noon, up 165c or 5.44% with over R81 million worth of shares swapping hands by the halfway mark.
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