EROAD Limited

ASX:ERD

EROAD Limited

ASX:ERD
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$0.925 (+5.7%)
Last close price
#392
Rank
9
Held by
55
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Reports (7) My Report Forum Investors
Forum Topics ERD ERD CEO stepping down
thunderhead
Added 3 years ago

I don't like it either, especially the manner in which it was suddenly foisted upon shareholders without any prior warning or proper explanation.

12
Strawman
Added 3 years ago

Yeah it's not welcome news for me @Valueinvestor0909

As the founder and driving force behind he business, I would have much preferred it if Steven Newman was sticking around. I may have missed it, but i wasn't aware either that this was on the cards.

Yeah, succession planning may have been in train for a while, but this is just part of normal contingency planning as I see it.

It's really hard to know what's behind the move. It could be totally innocuous and entirely unrelated to his view of the business (eg perhaps some family or health issues), or something else.

The news isn't enough to cause me to sell out -- it still seems well placed to grow sales and cash flows in the coming years -- but will certainly be interested to see who the replacement is.

26
Valueinvestor0909
Added 3 years ago

Yes, I wish I was as optimistic and patient about it as you are. If CEO/CFO departure is for a totally innocuous and entirely unrelated reason, the company should at least specify that in the announcement ( obviously, without going into the privacy of CEO/CFO ) just the statement " stepped down because of personal reason" would at least give some kind of hope to me. rightnow i am just forced to think negatively.

I was attracted to Eroad initially because of founder-led and visionary CEO who was also involved in NAVMAN and had significant skin in the business so I did build my thesis around it. This news has clearly shaken my belief ( rightly or wrongly) and thesis.

  • Growth was slowing before this announcement
  • now EROAD required leadership to integrate one of the bigger acquisitions - Risk now is high without CEO/founder ( in my mind)
  • I can abviously buy back if i get more confidence later down the track but i just sold this morning in RL and in SM -- will keep monitoring and learn from it


PS: as i have sold, very high chances that the Share price will go up from now on.




19
Strawman
Added 3 years ago

Trouble is, if they had said "for personal reasons" we'd all suspect it was something else :)

It's like politician retiring because they "want to spend more time with the family". No one buys it.

I guess time will tell.

18
Valueinvestor0909
Added 3 years ago

Very true...



12
Slomo
Added 3 years ago

Also disappointed with the lack of disclosure.

That messaging suggests to me that he was pushed.

If so, I expect this is because they now need a CEO who can execute on such a large scale opportunity (probably US based) rather than take a start up from nothing to where it is now (with Coretex). Steve is very Auckland based, this business is now very US focussed. He's also a serial starter. This business is now focused on scaling.

I think EROAD's prospects now depend very much on who they bring in, the mandate / strategy they're given to execute on and how they message all this.

On the positive side this has eliminated the key person risk (not in the best way but it's done) and if he was pushed we may see why if a new CEO is able to scale into the US.

Disc: Held

18
Solvetheriddle
Added 3 years ago

results in about 6 weeks so may know more then

15
Valueinvestor0909
Added 3 years ago

Yeah this probably will go same path as PPH, if he decides to sell down and then market will wait for new CEO to prove him/herself

10
cbirtles
Added 3 years ago

Not sure about that. My rudimentary understanding of PPH was that they had taken up a fair share of their target church market, rode a wave of online giving associated with COVID restrictions and now growth has stagnated.

contrast ERD where as I understand it they have a fair amount of growth left in the US market.

welcome contrary views

13