What happened
The well-regarded CEO of Olin (OLN 1.25%) plans to step down early next year, and investors are disappointed to see him go. Shares of the chemicals maker fell by as much as 14% on Friday morning as Wall Street tried to come to terms with the surprise announcement. As of 11:18 a.m. ET, the stock was still down by 13%.
So what
Olin manufactures a range of chemicals including chlorine, vinyl, bleach, and hydrochloric acids, and also makes ammunition. CEO Scott Sutton has led the business since September 2020, a period during which the stock has risen by more than 300% and has beaten the S&P 500 by more than 250 percentage points.
But Sutton has apparently decided it is time to move on. On Friday, the company announced he will step down in the first half of 2024, though he will remain executive chairman until his departure to help facilitate a smooth transition.
"It has been a privilege and an honor to lead Olin," Sutton said in the press release announcing his departure. "Olin has a great future ahead and the board and I are working closely together to identify an excellent leader who will enable the next phase of growth for Olin building on our strong foundation."
Now what
There is no sign of trouble here, based on the information provided. Sutton is planning a slow, gradual departure and will work side by side with the board to make sure there is a stable transition. Still, Wall Street hates uncertainty. And given that Olin announced a bolt-on acquisition just a week ago, there was no reason to believe an executive change was imminent.
For long-term investors, there is no reason to panic. But transitions are never easy, and shareholders should watch carefully to make sure that things go to script with the new CEO. It is understandable that some investors have decided to book their gains from recent years and watch the next chapter of Olin's story play out from the sidelines.
