Sayona Mining (ASX: SYA) (OTCQB: SYAXF) shares are down 27% today. SAY shares dropped on the news of the immediate resignation of the CEO. At which point, well, yes. For disasters happen in families and of course the family is the most important thing in anyone’s life. So, it will happen, sometimes, that a CEO needs to drop the work and go tend to the family. It’s also true that, in English English at least, “wanting to spend more time with the family” is a code for someone having been fired. Fired for having done something wrong, too, but which no one wants to talk about directly as yet.
As we say, CEOs really do leave for family reasons. At times. Which is what is producing the fragility in the Sayona share price: “Mr Brett Lynch has resigned from his position as Managing Director and CEO for personal reasons and will depart the Company with immediate effect.” Well, yes. And to add to that code-talk: “The Board wishes to thank Brett for his service to the Company and wishes him well in his future endeavours.” That isn’t code-talk for “Darn we lost a good one here, wish we could have him back.”
And then there’s this: “The Board will take this opportunity to undertake a thorough review of operations and the strategic direction of the Company to further enhance shareholder and stakeholder value.” Well, how much reconsideration of operations and strategic direction do you need if the CEO left for those personal reasons? You see the difficulty here?
Sayona Mining share price from Google Finance
This isn’t what should be happening here. Actual lithium mining is boring as compared to exploration. So, as we’ve said about Sayona Mining: “Yet the SYA share price is in general and gentle decline. So, what’s going on here? One aspect of this is just that old market adage, buy the rumour and sell the fact. The excitement of what might be about to come often does drive a share price up over objective value. Meaning that when the news arrives then there’s a reconsideration - well, hmm, so it’s not actually that, that, exciting, is it? - and we see something of a reversion. While that would explain what’s happening here that might not be all of it. There’s a more controversial theory that floats around the mining industry which could be the cause here.”
It’s clearly not in a gentle decline here. And we’d expect continued fragility in the price over time as the rest of the story comes out. If those personal reasons for the resignation turn out to be truly personal then we can see a recovery. But if this is about something that happened within the company itself - and we’re not speculating at all about what nor even whether - then things could get much worse.
