Karooooo Business Stays Strong Despite Zak Calisto’s $75M Share Sale – KROJ Still a Buy?
Karooooo Ltd.’s stock came under sharp pressure this week after a surprise share sale by its CEO, overshadowing otherwise strong Q1...
Quick overview
- Karooooo Ltd.'s stock dropped over 15% following a surprise share sale by CEO Zak Calisto, despite strong quarterly results.
- The CEO's divestment of 1.5 million shares aimed to raise $75 million, causing investor concerns about the timing and scale of the sale.
- Karooooo reported a 3% revenue beat for Q4 and a record 17% increase in net subscriber additions, reaffirming its growth forecast.
- Technical indicators suggest potential support for the stock, leading some investors to view the decline as a buying opportunity.
Karooooo Ltd.’s stock came under sharp pressure this week after a surprise share sale by its CEO, overshadowing otherwise strong quarterly results and continued global expansion.
Karooooo Shares Slide 15% After CEO Share Sale Despite Strong Fundamentals
Karooooo Ltd. (JSE: KROJ), the parent company behind the Cartrack fleet management platform, saw its stock tumble this week, plunging more than 15% after CEO Zak Calisto announced a major share divestment. On Thursday, shares slid sharply from around R1,050 to a low near R890, wiping out nearly 20% from the late-May highs above R1,110.
KROJ Share Price Chart Weekly – The 20 MAs Will Likely Hold the Fall
This abrupt reversal followed a period of sustained optimism driven by strong Q4 earnings, aggressive international growth, and record net new subscriber additions, which had previously pushed the share price into new territory.
CEO Calisto’s $75 Million Selloff Triggers Investor Jitters
Karooooo disclosed that CEO Isaias “Zak” Jose Calisto would be selling 1.5 million common shares via a secondary public offering, priced at $50 per share, aiming to raise $75 million in gross proceeds. While the sale is part of a secondary offering and not a capital raise for the company itself, markets reacted negatively to the timing and size of the sale.
Despite the decline, technical indicators on the daily chart remain supportive:
- The 50-day simple moving average (SMA) is currently providing short-term support.
- The price still holds well above the 200-day SMA, suggesting the broader uptrend remains intact.
Solid Fundamentals Remain in Place
- Importantly, Karooooo’s operational momentum has not wavered:
- The company reported a 3% revenue beat for the fourth quarter of fiscal 2025.
- Net subscriber additions rose 17% year-over-year, a record high.
The company reaffirmed its organic subscriber growth forecast of 18% for FY2026, signaling continued strength in its core business.
Karooooo’s Singapore headquarters and its Cartrack Software-as-a-Service (SaaS) platform remain central to its global expansion strategy, delivering real-time analytics, telematics, and fleet management solutions across multiple markets.
Buy the Dip? Setup for a Bullish Reversal?
While the CEO’s personal share sale raised eyebrows, the underlying business remains robust. With the price hovering near technical support levels, and bullish fundamentals intact, investors may see this pullback as a buying opportunity.
Next week will be critical in confirming whether the downtrend has bottomed and whether the stock begins a technical reversal upward. For long-term investors focused on operational performance rather than insider sales, this may represent a strategic entry point.
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