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 Quiksilver (NYSE:ZQK) were down nearly 13% as of 1:50 p.m. Friday after the surfwear specialist announced the replacements of both its CEO and CFO.
So what: Specifically, in a press release Friday morning, Quiksilver stated its now-former CEO, Andy Mooney, is "no longer with the company," and will be replaced by 27-year Quiksilver veteran Pierre Agnes. Quiksilver co-founder Bob McKnight has replaced Mooney as chairman. Finally, Quiksilver announced that Thomas Chambolle, formerly the company's EMEA Region CFO, will replace Richard Shields in the primary CFO role. Quiksilver says Shields "has resigned to "pursue other opportunities." The company said Shields will serve as a consultant to the company and resource to Chambolle.
Now what: Of course, Quiksilver didn't exactly give investors much to go by with regard to reasons for the shakeup. But keep in mind that while Quiksilver shares popped last week following its latest quarterly results, those results were originally postponed earlier this month while the company awaited results of an audit committee investigation into a "deficiency in the company's internal controls related to quarter end revenue cut-off." Still, Quiksilver noted the issue did not have a material effect on its previously filed financial statements, so perhaps that's why today's news comes as a surprise.
To be fair, though, Quiksilver stock has badly underperformed the market since Mooney took the reins as CEO in early 2013, and are down around 73% over the past year as of this writing. And Agnes' focus, according to Quiksilver, will be primarily "on improving operational execution and efficiencies, and identifying growth opportunities, especially in the U.S. wholesale channel."
In the end, it seems unsettling that those fundamental problems exist at all for this relatively established company. Given the uncertainties surrounding this transition, and until Quiksilver can show some progress in addressing its challenges, I'm perfectly content watching this story unfold from the sidelines.
Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.