Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Iconix Brand Group (ICON) were down 15% as of 11:50 a.m. Monday after an SEC filing revealed another executive has abruptly resigned.
So what: Specifically, in an SEC filing dated Friday, Iconix says COO Seth Horowitz tendered his resignation on April 13, 2015 -- the same day a short-seller's detailed article was released questioning the company's accounting methods. That short-seller also followed up with another article two days later calling into question Iconix's earnings power. Horowitz only served in the post for roughly one year, and Iconix says it isn't seeking a replacement COO at this time. Instead, it's allowing the COO responsibilities to be "assumed by the broader Iconix team."
If that wasn't enough, keep in mind that less than one month ago a separate SEC filing showed Iconix's CFO Jeff Lupinacci resigned "to pursue another business opportunity." Iconix stated at the time it had commenced a search for Lupinacci's replacement.
Now what: Of course, these two executive departures certainly don't guarantee the short-seller is correct. But they also don't do Iconix any favors in the eyes of skittish investors. For now, and until we have more detail on whether the allegations have merit, I think investors would be wise to watch this situation unfold from the sidelines.
