What happened
Volta (VLTA) stock crashed Monday and was trading down a jaw-dropping 21% as of 10:50 a.m. ET.
With inflation hitting 40-year highs, fears of a more aggressive interest rate hike from the Federal Reserve and recession are looming larger than ever, triggering a sell-off in stocks. Volta's plunge today, though, goes beyond the broader market weakness: Uncertainty looms large on the future of the company, which primarily derives revenue from advertising on electric vehicle charging stations.
So what
This morning, Volta announced some changes to its C-suite, including an update about an executive-level departure that even attracted an analyst downgrade.
Volta's chief financial officer (CFO), Francois Chadwick, who was previously with ride-hailing giant Uber and joined Volta in April 2021, is leaving the company in August.
Volta's founder and CEO, Scott Mercer, had already announced his decision to step down earlier this year. Meanwhile, the company has appointed Vincent Cubbage as the interim CEO. Cubbage was already on Volta's board of directors, having previously led special-purpose acquisition company (SPAC) Tortoise Acquisition Corp. II, which merged with Volta to take it public.
Importantly, Volta's chief revenue officer, Brandt Hastings, had been acting as the interim CEO, but Cubbage's appointment now makes it clear that the company hasn't been able to find a suitable candidate to take the helm yet.
Volta also appointed Stephen Pilatzke as its first-ever chief accounting officer. Pilatzke has mainly served in energy companies over the past decade or so.
Now what
Analyst Andres Sheppard from Cantor Fitzgerald was quick to downgrade Volta stock's rating and price target to $4 per share from $6 a share after today's C-suite shuffle.
Fitzgerald still believes Volta's revenue could more than double in 2022, but the departure of two top-level executives, CEO and CFO, adds an element of uncertainty around Volta's management.
I can't argue with Fitzgerald's views, as the timing of these executive departures raises several questions.
In its quarterly regulatory filing in May, Volta's management stated that it had "substantial doubt about the company's ability to continue as a going concern in the next 12 months" given its financial position. For context, Volta had accumulated losses worth $476.9 million and held cash worth only $205.4 million as of March 31, 2022.
Volta stock plunged after that announcement, and it's been having a hard time finding a bottom since.
Volta stock now also faces the threat of delisting from the New York Stock Exchange, because it's been trading significantly below $4 per share since late March and is therefore in failure of one of the criteria required for it to stay listed.
