In morning trade the Class Ltd (ASX: CL1) share price has crashed lower following the release of a late announcement on Wednesday.
At the time of writing the SMSF platform provider's shares are down 7.5% to $2.00.
What was announced?
Just a little over a week since its annual general meeting, Class has decided to part ways with its chief executive officer.
According to the release, Kevin Bungard is stepping down from the role by mutual agreement with the board. Mr Bungard has been the company's CEO since April 2014 and led it through its listing on the ASX in December 2015.
The release explains that Mr Bungard and the board have agreed that the next stage of the company's growth requires new leadership. A search for a new CEO has commenced and will include the evaluation of potential internal successors.
The company's chief financial officer, Glenn Day, will take on the role of acting CEO until an appointment is made. Mr Bungard will remain available to consult to the company during the balance of his three months' notice period.
What now?
As we saw yesterday with Super Retail Group Ltd (ASX: SUL), a change of CEO doesn't tend to go down well with investors.
However, on this occasion, I feel it could be the right move by the company. After a strong start to the life on the ASX, I've been thoroughly underwhelmed with the company's performance over the last 12 to 18 months.
Furthermore, the recent promotion offering Class Super and Class Portfolio free until July 1 doesn't fill me with confidence that things are improving. Clearly something needs to be done to improve its performance and a change at the top might just bring new life into the company.
Should you invest?
While I see this as a positive, I wouldn't be in a rush to invest and would suggest investors wait to see what impact a new CEO has on its performance.
As things stand, I'm quite bearish on the company's short to medium term prospects and believe its shares are still overvalued despite a sharp decline over the last 12 months.
Instead of Class, I would look at fast-growing fintech companies such as Bravura Solutions Ltd (ASX: BVS) Hub24 Ltd (ASX: HUB) when the market volatility dies down.
