The Purifloh Ltd (ASX: PO3) share price tumbled to a near two-year low today after it announced the sudden resignation of its chairman.
Shares in the water and air purification technology developer crashed 15.3% to $1.61 in the last hour of trade.
In contrast, the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) are trading around breakeven.
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Purifloh share price rocked by sudden exit
Companies that are involved in decontamination should be well regarded during the COVID-19 pandemic. But investors got spooked when PuriflOH's chairman Bill Parfet resigned with immediate effect.
"It has been an honour to lead Purifloh over the past 12 months though I now wish to spend more time in retirement with my family," said Mr Parfet.
"I depart with nothing but good wishes and best regards for the Company, my fellow Board Members and the management team.
"I plan to continue to support them as best I can through continuing with my shareholding and offering guidance where requested."
Can't de-sanitise bad news
Investors haven't taken the news well despite Mr Parfet's explanation. The sudden and immediate resignation of any key executive tends to trigger a share sell-off. Shareholders are selling first and asking questions later.
Management tried to cushion the fall in the PuriflOH share price by stating that Mr Parfet doesn't intend to sell his shares in the company.
Mr Parfet will be replaced by Carl Le Souef, who controls Dilato Holdings Pty Ltd. Dilato is a major shareholder in PuriflOH.
PuriflOH's new chairman
"All shareholders owe a debt of gratitude towards Bill for his investment in PuriflOH, together with his efforts on behalf of the Company," said Mr Le Souef.
"We thank Bill for his support and leadership and wish him the very best in his retirement.
"We plan to release a detailed update of activities in the near future."
Already in strife
One can't rule out a cap raise. The company holds around $2.4 million in the bank, which management stated in its 4C is enough to last it for a little over two quarters.
Our share market operator ASX Ltd (ASX: ASX) suspended PuriflOH at the start of August after it submitted an incomplete 4C, or quarterly cash flow report.
Talk about a bad look!
Little wonder investors are jittery to any bad news.
