The share price fall of Vocus Communications Limited (ASX: VOC) today is interesting, after the departure of Executive Director James Spenceley and Non-Executive Director Tony Grist.
It seems Mr Spenceley and Mr Grist had proposed an alternative candidate for the CEO position commencing in 2017, which was not well-received by the board. Mr Grist resigned, while Mr Spenceley was asked for and subsequently gave his own resignation. James Spenceley also made the news at the end of August when he sold the majority of his Vocus shares.
Tony Grist however has been a buyer, and recently purchased another 250,000 Vocus shares just last week.
Out with the old…
There have seemingly been a few 'differences of opinion' in the Vocus head office (which is also composed of executives from M2 Group) lately, with Grist and Spenceley just the latest to leave following the surprise resignation of Chief Financial Officer (CFO) Rick Correll three weeks ago.
This does come as somewhat of a surprise given that CEO Geoff Horth was the man specifically appointed to oversee the integration of M2, Vocus, Amcom, and the recently-acquired Nextgen. Presumably this merger must have required the agreement of most key figures in the pre-merger Vocus executive team. Either way, with many key Vocus executives departing, the board should be able to focus on the work at hand.
While board upheavals are usually a time of significant unrest amongst investors and the company's share price, readers should remember to focus on the business at hand – which is a good one. After the recent plunge in share prices, both Vocus and TPG Telecom Ltd (ASX: TPM) are looking significantly cheaper at around 17x their forecast earnings for the year. This isn't much more expensive than industry titan Telstra Corporation Ltd (ASX: TLS), and I think there are many worse businesses out there at a similar price tag.
