When CFO’s resign, stock prices go lower. This is because markets don’t like uncertainty – a fact that should make sense to anyone, regardless of whether they trade or not. Shares of MobileIron, Inc. ($MOBL) are down near 30% in early trading, as CFO Todd Ford got another job. I realize small companies miss numbers, but markets often overreact to any change in this key C-Level position.
Finance chief Todd Ford is leaving to join another company no later than May 4, MobileIron said in a statement. It didn’t disclose his new employer. “The departure is not based on any disagreement with the company’s accounting principles, practices or financial statement disclosures,” said the Mountain View, California-based company.
These are new lows for MobileIron, with shares falling below the previous support of $7.64 made in July 2014. In fact, there is a great deal of negative news today, as Morgan Stanley ($MS) also downgrades MOBL on the back of missing most analyst numbers with first-quarter revenue between $32 million and $33 million, the company said in a regulatory filing Wednesday. According to data compiled by Bloomberg, analysts had estimated sales of $36.4 million on average.
Mobility Management Programs Pick up Slack
If there are accounting related issues for the company, we will see the information surface over the next few quarters. In the meantime, the enterprise the mobility management (EMM) platform allows companies to shift from a stipend reimbursement to a data plan allowance that reflects anticipated business usage. Recently, MOBL launched the AT&T Inc. ($T) Work Platform, which lets employees separate business and personal voice calls by making work-related phone calls over the platform rather than the employee's wireless carrier. This is a growing security need for companies since the Sony Corp ($SNE) hack, and missing a number is not unusual in a growing space.
The market will tell if there are any follow on accounting issues or stock volatility exists. Often, bottoms are put in as shareholders exit at the first sign of new lows or C-Level changes. For now, we will see if the exit of CFO Ford was in the normal course of business - if so, shares will go back to watching the fundamentals, and volatility should decline.
It is very difficult for traders to get a feel for price action around earnings, and all portfolio managers who think we are putting in a bottom will be searching for evidence of the cleanup seller to surface. For now, it is difficult to tell if that will happen today.
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