Board changes
On 30 September, Atomos advised that independent non-executive directors, Stephen Stanley and Lauren Williams, were resigning from the board, effective immediately. The announcement provided some insight, which I found really interesting: 'both have expressed their concerns over board effectiveness and misalignment in decision making'.
This is yet another red flag -- arguably the biggest one in the last few months. It is one thing to have an ex-employee causing issues externally, but two board members resigning effective immediately based on existing concerns with the structure and decision making of the board? Sheesh. All is not right with Atomos. I was initially keeping an eye on them given the share price battering in recent months -- thinking maybe there is an opportunity here -- but this is increasingly looking like a value trap with some glaring internal issues.
I think this is also a key example of the 'share price can always go lower'. It reminds me of what Gaurav was saying in his recent interview with us -- pack up and sell when the investment thesis changes or the water starts to become cloudy. Props to the Strawman members that acknowledged this a few weeks/months ago and cut their losses. I think the worst is yet to come for Atomos and the resignation of two board members further demonstrates this.
