Specialty chemicals company Ingevity saw its value plummet after CEO John Fortson left the boardroom for the last time on Thursday. The stock price slump was the biggest since March 2020.
The value of Ingevity’s stock had been declining steadily since September. The price then went off a cliff on the day the company announced Fortson’s departure, which rattled investors and sent the shares tumbling to U.S.$31.07 each from $37.46, a drop of 17%.
According to the Wall Street Journal, Ingevity did not give a reason for his departure but revealed he was eligible for a severance package that is consistent with an involuntary termination.
“Performance of the stock price is of course the greatest indicator of what the board is going to think of his performance and for the stock to have dropped from over $90 a share in mid-February 2023 to $37.46 even before his firing is just an awful year-and-a-half,” John Yackley, senior SP500 options trader at ARB Trading Group, told Lube Report. “And the board as well as investors know this collapse has occurred during a period of time when stocks have had a great bull run.”
Fortson had been CEO at Ingevity since September 2020. In that time, the company had undergone a series of streamlining efforts with the intention of optimizing feedstock and improving profitability.
In 2023, the company ended crude tall oil operations at its plant in Louisiana. Then in July this year, it ended a supply partnership with crude tall oil supplier GP Pine Chemicals LLC. The termination cost Ingevity $100 million in breakup fees.