Leadership Change: What implications can this have for a listed company?

[BeeDeeStocks]

Hi all I saw today 4DS has appointed a new Managing Director/Ceo just wondering do changes like this have any implications on the company's stocks and how well they do in the market? I'm very new to this so any help is appreciated thank you

 

[greggles]

It depends on the change being made and why the change was made.

Sometimes a person, such as Elon Musk, can be so associated with the success or vision of a company that to swap them out for another CEO can have a profound impact on the way a company is perceived by the market. Good leadership is as asset to a company, while poor leadership is a liability. The ultimate judge of whether a leadership change is a positive or negative for a company is the market. A change for the better is likely to result in an increase in the company's share price, while a change for the worse may result in a share price decline. If there is no reaction by the market then you can probably safely assume that the change is neither positive or negative, or is at least perceived this way by market participants.

If a number of executives walk away from a company at the same time or in quick succession, it might be a sign a company is in trouble. In a case like this you should definitely do your own research into why this occurred and make an informed decision about whether or not to stay invested in the company.

 

[Smurf1976]

Sometimes a person, such as Elon Musk, can be so associated with the success or vision of a company that to swap them out for another CEO can have a profound impact on the way a company is perceived by the market.

Agree although I'll add that from my observations it's less common that a company thrives due to one person (eg Elon Musk or in previous times Richard Branson or Steve Jobs) than it is that one person comes in and destroys a previously sound business.

The list of businesses wrecked by a dud manager would be a lot longer than the list of companies that made it solely due to one person.