The Lark Distilling Co Ltd (ASX: LRK) share price has fallen today after the sudden departure of its Managing Director and CEO Geoff Bainbridge.
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What happened to the Lark share price?
Currently, the Lark share price is down 21.10% to $3.59.
Mr Bainbridge tendered his immediate resignation to the board yesterday afternoon to “enable him to manage a personal matter”.
The personal matter is reportedly in relation to a video published by The Australian of Mr Bainbridge smoking a methamphetamine pipe.
Reporting by The Sydney Morning Herald and The Age revealed the video was taken on a trip to South-East Asia and then used to blackmail Mr Bainbridge since 2015:
“Bainbridge hopes that the exposure of the video will end his ordeal and eventually, bring him relief. He says he is principally worried about the impact this sordid episode will have on his four children”.
“Ultimately, I put myself in a situation I shouldn’t have been in,” he says. “I’m a victim of extortion but that wouldn’t have occurred without my poor judgment. I am deeply remorseful for my own actions”.
Search for CEO accelerated
Current Non-Executive Director Laura McBain has assumed the role of Managing Director as of today.
Ms McBain previously held the role of CEO at formerly ASX-listed Bellamy’s from 2014 to 2017.
She went to become CEO at Maggie Beer Holdings Ltd (ASX: MBH) from 2017 to 2019 and is a former director at Export Finance Australia from 2014 to 2020.
The Lark Board had already commenced a search for a global CEO in December as part of succession planning.
“This process will now be accelerated and led by Ms McBain and the Board”.
Why now could be a great time to buy Lark shares
Notwithstanding the Lark share price fall, the company is effectively unchanged.
It’s still selling whiskey. Customers still buy the product. The barrels continue to mature.
From an investor’s perspective, it’s business as usual for the company.
Sure, it will have to find a new CEO. But that process was already underway.
Lark also already has a proven CEO in its ranks to take over in the short-term, allowing the Board time to appoint the right candidate.
Furthermore, the business is now trading well below the value of its assets.
In its December update, Lark said by the end of FY22 it would have $430 million of inventory on hand.
Yet its market capitalisation is just $271 million.
Overall, if you have confidence in the long-term prospects for the Lark Distilling share price, today would likely be a great time to jump in.
