The Bubs Australia Ltd (ASX: BUB) share price is crashing deep into the red on Thursday.
In morning trade, the infant formula company's shares are down 15% to 19.5 cents.
Why is the Bubs share price sinking?
The Bubs share price is under pressure today after the company revealed the results of proxy voting ahead of its extraordinary general meeting (EGM).
The good news is that Bubs' new board looks set to claim an emphatic victory after dissident shareholders, led by its value-destructive former management team, failed to get anywhere near the required votes to remove directors and appoint their own.
Approximately 61% to 62% of proxy votes were against the seven resolutions that were proposed by dissident shareholders.
In light of this likely defeat, it wouldn't be surprising if these shareholders or their supporters have been selling their shares today, putting pressure on the Bubs share price.
At 11am, 12 million Bubs shares have been traded on-market. To put that into context, just under 1.2 million were traded yesterday and 1.5 million were traded a week ago.
'An important day'
Ahead of the EGM, Bubs' recently appointed chair, Katrina Rathie, revealed that she hoped whatever happened today, would be the end of the matter. Ms Rathie said:
Today is an important day for Bubs. After the shareholder vote today, I believe that all parties must unanimously accept the outcome of each resolution, even if it is not their preferred outcome, and move on in the best interests of the Company.
Irrespective of the voting outcome, there are still significant issues, challenges and opportunities facing the Company which will require steadfast focus from our team as the business re-sets.
Rathie also revealed that the appointment of a new permanent CEO is progressing very well. In fact, one could be appointed as soon as next month. She adds:
You will be pleased to hear that the Board is well advanced in our search for a new CEO and if the Board is returned today, we expect to announce our CEO appointment in August 2023.
In the circumstances of this EGM, we did not think it was fair or reasonable to make an appointment that might be subject to change should shareholders support the CEO candidacy of Mr Peter Nathan as proposed by the requisitioners. The CEO must have the complete support of the Board and a clear mandate going forward to implement the strategy and Board endorsed business direction of Bubs.
Here's hoping that this is the start of better times for Bubs and its shareholders.
