WiseTech shares soar after CEO Richard White switches to new role
WiseTech Global shares have skyrocketed after chief executive Richard White shifted to a different role in a bid to defuse damaging allegations about his behaviour with women.
Shares in the Australian freight-software company jumped 22 per cent at the open on Friday, almost completely recovering this week’s losses.
The company’s market capitalisation had slumped more than $7.7 billion since Monday after a series of ever-worsening media reports and claims about Mr White.
Mr White is taking a short break before starting a new role focused on product and business development, WiseTech said late Thursday. His new 10-year contract as a consultant comes with a two-year notice period, while his $1 million annual salary is unchanged.
The switch allows WiseTech to hold on to Mr White — the company’s co-founder, largest shareholder and arguably its most important asset — while officially stripping him of the top job. With no sign that Mr White is leaving any time soon, banks including Goldman Sachs and Citigroup told investors to buy the stock again.
“This announcement is a significant step towards resolving the uncertainty,” Goldman analysts led by Kane Hannan said in a note, upgrading WiseTech stock to a buy. “The significant selloff presents a compelling opportunity to buy one of Australia’s best global growth stories.”
Mr White’s long-term contract in his new role highlights his commitment to the company, Mr Hannan wrote.
Mr White’s resignation as CEO followed accusations that he had paid millions of dollars to a former partner to settle allegations of inappropriate behaviour.
It was reported a former board member at WiseTech had accused Mr White of intimidation and bullying. The media report also said Mr White had a years-long relationship with an employee before gifting her a $7m waterfront house in Melbourne.
While the company hasn’t specifically addressed the multiple allegations levelled at Mr White, law firms Herbert Smith Freehills and Seyfarth Shaw have been hired to assist a board investigation into the claims.
Chief financial officer Andrew Cartledge becomes interim CEO immediately and the search for a permanent replacement will start soon, WiseTech said Thursday.
Morgan Stanley said in a report that “key-man risk” — an apparent nod to Mr White’s importance to WiseTech — has always been the biggest threat to the stock.
White founded WiseTech in 1994 with Maree Isaacs, turning it into a key provider of the software that co-ordinates logistics and shipping across the world. Twenty-two years later the company was valued at $1b when it listed on the Australian Securities Exchange.
The following year it entered the S&P/ASX 200 and today it employs 3300 people across 37 countries. It claims the majority of the world’s biggest global logistics providers and freight forwarders among its clients, including DHL, China’s Sinotrans, Japan’s Nippon Express and APL Logistics.
The company’s solution to this week’s crisis means “the key drivers of a long path of rising intrinsic value are intact”, Morgan Stanley analysts led by Andrew McLeod said in a note, reiterating an overweight rating on WiseTech stock.
“Accumulating at this time will reward long-term investors,” McLeod said.
Bloomberg
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