WTC –14.56%: Was slammed today after the company acknowledged recent media reports and announced it was looking into allegations of misconduct by founder and CEO Richard White. The stock has seen a swift fall from grace over the past few weeks, diving 28% from its highs – trading as high as $139 in early October, down as low as $100.02 today before popping and closing at $104.65.
Media reporting of the saga has seen several twists and turns over the past month, seemingly chipping away at the share price week by week. The latest relate to allegations company funds were used by the CEO to pay for a property and other lifestyle items for a former mistress. Questions are also being raised around excessive pay for a former female executive of the company, which was not disclosed to shareholders at the time.
The market looks to be pricing in a high chance we’ll see more allegations (probably likely) and the potential for a change of management i.e Richard White stepping down. Losing White at the helm would be a loss from a business perspective, though the allegations keep surfacing from multiple parties with these sorts of allegations from these sorts of people generally spread far and wide. While the CEO has incredible influence at WTC, and a substantial 38% shareholding in the business, our guess is there is more to come out about this.
- While the fundamentals of the company have not necessarily changed, and we liked the August result discussed here, given the unknowns relating to the CEO, we’d prefer to let this one play out from the sidelines.
MM remains neutral towards WTC
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