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Why Harley-Davidson Stock Is Rising 6% Today

By Rich Duprey – May 7, 2020 at 10:49AM

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The motorcycle maker appointing a new president and CEO might not be the good news it seems, though.

What happened

Harley-Davidson (HOG -2.90%) stock is moving 6% higher in morning trading on Thursday since the motorcycle manufacturer announced it had appointed acting president and CEO Jochen Zeitz to the positions permanently. 

So what

The troubled bike maker has been operating without a chief executive since March, when Matthew Levatich abruptly left the company and resigned from his position on the board of directors. 

Motorcycle rider under a bridge

Image source: Harley-Davidson.

Private equity firm Impala Asset Management maintains it was instrumental in ousting Levatich from the company prior to cutting a deal with Harley-Davidson to gain a seat on the board of directors.

Now what

While the market seems to like the news following Zeitz's performance during the earnings conference call, on which he outlined something of a new direction for the bike maker, it means Harley-Davidson's CEO and board of directors have not a single person with any industry experience. Zeitz is a former executive at sneaker maker Puma.

There's a good argument to be made for having outside voices provide advice and guidance to a company, as tunnel vision and myopia can lead to lethargy. It is less clear how beneficial it is to have no one around who knows and understands the industry, particularly when it's the motorcycle industry, which is currently undergoing a radical transformation.

Harley-Davidson stock might be up today on the news, but the gains may not last.

 

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Harley-Davidson, Inc. Stock Quote
Harley-Davidson, Inc.
HOG
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