Investors in space tourism pioneer Virgin Galactic (SPCE 6.44%) are not having a great day -- the stock was down by 8.3% as of 3:30 p.m. EST. And no, it was not just because everything tech-stocky seemed to be selling off Thursday.
Rather, it looks like Virgin Galactic shot itself in the foot.
Thursday morning, with Virgin Galactic due to deliver its Q4 earnings (aka its Q4 losses) after the close of trading, it announced that Chief Financial Officer Jon Campagna is stepping down from his post. He's being replaced by Doug Ahrens, previously the CFO of tech hardware company Mellanox.
Now, Virgin Galactic doesn't consider this bad news. In its statement, management implied that Campagna had really only planned to stick around through its "successful transition from private to public company" and, this accomplished, it was time for him to move on. Additionally, CEO Michael Colglazier heaped praise on Campagna's replacement, saying Ahrend's "deep experience helping global manufacturing companies scale and grow, combined with his tremendous capital markets and M&A expertise, will be incredibly valuable as we expand our production capabilities and work to monetize the business."
That being said, springing a C-level executive change on the market just hours before earnings seems like curious timing -- and investors don't seem to like the implications.
Are they right to worry? Well, Thursday afternoon's earnings news could certainly prove me wrong but -- no, I don't think so. Virgin Galactic has a relatively new CEO in Colglazier. It hired a new "experience architect" earlier this week, and a new investor relations chief two weeks ago -- and it's lining up two final test flights before beginning commercial operations.
If you ask me, all that's really happening here is that Colglazier is assembling the team of executives he wants to run the company as it begins transitioning from essentially an R&D shop into an operational space tourism company. The timing of this latest announcement may seem strange, but if it's all part of a bigger plan to get Virgin Galactic ready for prime time, I expect things will still work out fine for this company in the end.