What happened
Pioneer space tourism investors galactic virgin (NYSE: SPCE) not having a great day – the stock fell 8.3% as of 3:30 pm EST. And no, it wasn’t just because everything tech-stocky appeared to be selling Thursday.
Instead, it looks like Virgin Galactic shot itself in the foot.
Image source: Getty Images.
And
Thursday morning, with Virgin Galactic due to hand over its fourth quarter earnings (also known as fourth quarter losses) after closing negotiations, she announced that CFO Jon Campagna is stepping down. He is being replaced by Doug Ahrens, formerly CFO of technology hardware company Mellanox.
Well, Virgin Galactic does not consider such bad news. In its statement, management hinted that Campagna had really planned to remain only during its “successful transition from private to public company” and with that, it was time for him to move on. In addition, CEO Michael Colglazier praised Campagna’s replacement, saying that “Ahrend’s deep experience in 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 said, launching a C-level change in the market just hours before earnings seems like a curious moment – and investors don’t seem to like the implications.
What now
Are they right to be concerned? Well, Thursday afternoon earnings news can certainly prove me wrong, but – no, I don’t think so. Virgin Galactic has a relatively new CEO in Colglazier. She hired a new “experience architect” earlier this week and a new head of investor relations two weeks ago – and is lining up two final test flights before starting commercial operations.
If you ask me, all that is really happening here is that Colglazier is building the team of executives who want to run the company, as it begins to transition from essentially an R&D store to an operational space tourism company. The timing of this latest announcement may seem strange, but if it is all part of a bigger plan to prepare Virgin Galactic for prime time, I hope things will still work out well for this company in the end.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even our own – helps all of us to think critically about investing and making decisions that help us become smarter, happier and wealthier.