WiseTech Global Ltd (ASX: WTC) stock is under pressure again today.
Shares in the S&P/ASX 200 Index (ASX: XJO) tech stock closed down a precipitous 14.6% yesterday, ending the day at $104.65.
At the time of writing, shares in the logistics solutions company are trading for $101.67 apiece, down 2.85%.
This now puts WiseTech stock down 24% since the market closed last Tuesday, 15 October. The company's market cap has plunged to $34.11 billion.
However, as you can see on the chart below, the WiseTech share price has remained up 70% over the past year and up 286% over five years.
Here's why the company is in hot water again today.
Image source: Getty Images
What's happening with WiseTech stock?
Last Monday, 14 October, the Motley Fool reported on some outsized WiseTech stock sales by the company's co-founder and CEO Richard White.
The 461,891 shares, sold from 3 to 10 October, were transacted via RealWise Holdings, a private company White owns 91.8% of.
White received an average price of $132.89 for these share sales, or some $61.4 million. Adding in the shares he sold in September brings his total share sales to around $100 million in just over a month. That leaves White holding just over a third of WiseTech stock.
Buts the value of his holding took a big hit yesterday.
That followed on news of fresh allegations of inappropriate behaviours made against White, levelled by a woman who formerly had a relationship with the CEO.
The WiseTech board responded to the flurry of media articles yesterday, stating:
The board is currently reviewing the full range of matters raised in today's media reports and is actively seeking further information and taking external advice.
Today, the ASX 200 tech stock is under further pressure after anonymous sources said to have close knowledge of the situation (cited by The Australian Financial Review) reported that he was selling WiseTech stock to pay his former wife.
That contradicts White's previous statements, in which he claimed to be selling shares due to high demand from other investors.
What are the experts saying?
The reaction to the potentially sordid threads attached to White's WiseTech stock sales has been mixed among professional investors.
According to Institutional Shareholder Services' Vas Kolesnikoff (quoted by The AFR):
Private matters are private; company matters are not, and the disclosure issues by the company surrounding its executives is obviously something we will be looking at.
The board needs to tread carefully here. If it did not disclose company matters relevant to shareholders, then it needs to explain; the board needs to be acting in the interests of shareholders here.
TMS Capital portfolio manager Ben Clark, however, believes this won't have a material impact on WiseTech stock.
Clark said:
I think it's extremely unlikely that the value of the business will decline. At the same time, there's the question: could someone else be running the business?
The threat of a founder stepping down could change what investors are willing to pay for the stock.
