WTC –20.09%: Whacked today on downgraded guidance and the resignation of four non-exec Directors from the board. Lots of headlines about this which will provide fodder for the media, and while we’re not super close to WTC and don’t own the stock, our initial thoughts are as follows:
- They had previously guided to Ebitda of $600-660m, and now say they will be at the bottom end of that range given delays in product releases (possible due to the distraction etc)
- Consensus was at $662m, so the top of the range meaning the downgrade is ~10%.
- On the board issues, it seems pretty clear that Richard White is not keen to take a back seat, which the non-execs don’t agree with (or don’t get paid enough to agree with), and the Board is being restructured to accommodate as a result.
- White, as Founder and CEO has been instrumental in driving the product vision for WTC. We suspect investors would have been concerned if he was no longer deeply involved with that aspect of the business.
- There will be some headline impact, from the corporate governance optics, but longer term this is probably what the majority of investors would agree is in the best interests of the company and share price.
WTC now looks interesting into weakness <$100
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