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Kit Digital Inc. (KITD), a maker of online video software, rose the most in 2 1/2 months in Czech trading on speculation a record plunge last week was overdone.
The stock rose as much as 12 percent, its biggest intraday increase since Jan. 6, before trading up 6.5 percent at 123.49 koruna by 12:26 p.m. in Prague. That made Kit the biggest gainer in the 14-member PX (PX) index, which fell 0.2 percent today.
Kit slumped 27 percent in the previous session, the most since cross-listing its New York-traded shares on the Czech stock exchange in January 2010, after the company said it accepted the resignations of four board members, with three remaining as managers with the company. The stock slid 22 percent to $6.33 on the Nasdaq that day even as Kit reaffirmed its earlier earnings outlook for this year.
“The big stock-price reaction was unjustified,” Ondrej Moravansky, an analyst at Cyrrus AS in Brno, Czech Republic, wrote in a report to clients today. “While personnel changes in the highest posts are clearly important and a negative signal for investors, the company confirmed its outlook and all major members of the management are staying.”
Kit’s plunge on March 23 sent the 14-day relative strength index to 15.7 in Czech trading, the lowest in seven months. Readings lower than 30 suggest to technical analysts that a security may rise. The RSI last stood at 22.3 in Prague.
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