The WiseTech Global Ltd (ASX: WTC) share price has swung back into the green on Tuesday, potentially putting an end to the sharp sell-off that began mid-October.
Shares in the tech company are down 17% in the past week, as CEO Richard White finds himself embroiled in several controversies.
Today's rebound comes after CEO White settled his legal dispute with a former partner, bringing an end to the high-profile court case that had weighed heavily on the stock. You can see just how heavy in the chart below.
Investors have reacted positively to the news, with WiseTech fetching $109.08 apiece at the time of writing, up 3% on the day.
WiseTech share price swings on case update
White and his former partner Linda Rogan have settled their highly public and high-profile legal dispute outside of court.
In case you missed it, WiseTech's founder and CEO had allegedly attempted to bankrupt Rogan over a personal debt. The case – along with a few others involving White – has been making headlines and creating volatility for the WiseTech share price.
Today, a spokesperson for White stated that a settlement was reached to allow him to focus on WiseTech's growth strategy. Rogan has withdrawn all allegations.
The spokesperson said the matter was resolved "to avoid any distraction from his primary focus". According to The Australian:
Given this was a personal matter Mr White has settled to avoid any distraction from his primary focus which is on implementing WiseTech's growth strategy and continuing to create value for its shareholders and customers.
News around the case caused a stir. Investors and commentators alike worried about the potential impact on the company's image and leadership stability.
With the settlement in place, investors appear to have regained some confidence in the WiseTech share price, as evidenced by today's action.
Are they backing White? Is this a correction of a knee-jerk reaction? Or something else? Time will tell.
What's the outlook for WiseTech?
Despite the legal drama, analysts remain generally optimistic about the future of WiseTech shares.
According to CommSec, consensus continues to rate the stock as a buy. The most recent rating change was made in August, suggesting brokers weren't phased by this news.
Meanwhile, Bell Potter has a hold rating on the WiseTech share price. It cites valuation concerns, not an unreasonable point.
Especially given that WiseTech currently trades at a price-to-earnings (P/E) ratio of more than 171 times.
This high valuation means investors are paying a premium for WiseTech's future growth, banking on its ability to continue expanding in a highly competitive industry.
Is it worth that much? Again, time will tell.
While the legal saga may be over, WiseTech's leadership – executives and board included – will need to demonstrate that it can stay focused on delivering the goods.
That is value to shareholders without further distractions.
Foolish takeaway
With the court case behind it, the WiseTech share price has regained some lost ground, up 3% at the time of writing.
Zooming out, the stock is up 82% in the past year.
