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What: Shares of mobile phone software provider Motricity (NAS: MOTR) ended up with a bad connection with investors today after the company announced that it's canning its CEO. The stock jumped initially, but then plunged, losing as much as 12% in intraday trading.
So what: Sometimes a change in leadership is just what the doctor ordered when a company is stumbling. And, in fact, Motley Fool CAPS member HokieHovito said that's exactly what Motricity needs to get the engines revving again.
Though the company had previously said that it was planning a transition for CEO Ryan Wuerch, the decision appears to have been more abrupt than hoped for, as the company doesn't yet have somebody set to take Wuerch's place. While the search committee gets to work, current COO Jim Smith will step up into the CEO role.
Now what: Sure, the market as a whole has had a rough go of it recently, but Motricity's stock has taken a particularly painful beating. Since the end of June, the stock has lost more than 70% of its value, most of it after the company announced disastrous second-quarter results that sent shares swooning more than 50%. Not that losses are something particularly new for Motricity shareholders. After a post-IPO rocket ride to above $30 per share in late 2010, the shares have been on a steady dive ever since.
Can a new CEO right this ship? Based on the stock's reaction today, Mr. Market isn't convinced. As for me, given that the company hasn't proven itself a consistent profit-generator, I'm quite happy watching from the sidelines.
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