Deep Yellow (ASX:DYL) shares have sharply sold off on Monday as its long-time CEO John Borshoff made the shock announcement he’s on the way out of the top job, giving his CFO and the company’s non-Exec Chair greater responsibilities, while the former will stay on as adviser for the handover.
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This news apparently dampened sentiment across a basket of the most popular ASX uranium players; not helping matters is that uranium prices dipped overnight, whittling down MoM gains to just south of +2%.
But explaining why DYL staged an outside decrease of nearly one-fifth of its entire value could be best explained by the fact for some investors, this could all feel a little too close to what happened with Boss Energy earlier this year when its former CEO jumped ship days before a production guidance downgrade.
Duncan Craib, the former CEO of Boss, didn’t speak to journalists outside Diggers & Dealers only days after that happened (despite two uranium companies being the opening acts, for some reason) and has since been busy elsewhere.
That’s neither here nor there, but it’s not controversial to suggest that not all shareholders were particularly thrilled with this move.
Still, for DYL, YTD returns remain at +71%, at least for now. So while the sharp market response on Monday is a clear indictment of Borshoff’s exit, depending on how full your glass is, it mightn’t be a death sentence.
If we find out in the very near future the company is having troubles with its Tumas project – FID is due in the relatively near future – that could really get a panic going among the chooks. (Rightly so.)
Still, HotCopper users were fairly understanding of the news on Monday. Per their analysis, Borshoff is 77 now, and that’s been enough to placate the worst of nerves. And as ever, uranium sentiment will probably forevermore be a fickle beast.
DYL last traded at $1.92/sh.
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