When a Chief Executive Officer leaves or is forced out, investors may wonder how deep the problems run within the company or if new leaders will be able to keep up performance levels. This can trigger selling of the stock, driving down the price of the stock.
In some cases, if the company has performed poorly over an extended period of time, the departure of the CEO is received as a positive and welcomed change by shareholders and prospective investors. This type of scenario would drive up the share price.
In older, established companies, the departure of a CEO may not matter quite as much as in younger companies, where the CEO has greater influence over operations that are less established.
It's important to examine the financial health of the company before determining how a CEO departure will be received.
Using the LevelFields platform, you can locate CEO departures to see how the events affected share prices.
Using the filters, you can filter for companies with good and bad financial performance. For example, if you filter for profitable companies (EPS = positive) and medium to high revenue growth, the average price move for the stocks is very different than looking at unprofitable companies with low revenue growth.
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