WiseTech shares soared by as much as 22% to $121.33 today on news that Richard White has stepped down from the company’s board and as its chief executive following accusations of bullying and exchanging business advice for sex.
However White, who founded WiseTech 30 years ago, will retain strong influence over the company’s strategy as he is taking only a “short period of leave” before returning to a consulting role.
In that role White will receive the same annual salary of $1 million that he was paid as CEO. In order to “focus” on his new consulting role, White will also step down as a director of the Tech Council of Australia.
WiseTech’s board appointed chief financial officer Andrew Cartledge as interim CEO, who had planned to retire by the end of 2025 but has committed to staying on beyond this date if needed.
The company’s shares had traded above $139 earlier this month before White’s conduct was exposed and shares dropped to as low as $99.37 on Thursday — the first time the stock had traded below $100 since August.
White is said to have attempted to bankrupt wellness entrepreneur Linda Rogan over a $91,000 debt related to luxury furniture purchased for a Sydney mansion he allegedly bought for her in 2022, before their affair was revealed to his wife.
The allegations also prompted psychologist Jenna Riches to step forward, accusing White of offering business advice in exchange for sexual favours.
It was also revealed that White purchased a house for businesswoman Marcia Kensell in Sydney’s Lane Cove in 2018, leading to a legal dispute between the two, which has reportedly been settled confidentially.
Analysts not overly concerned
Despite the “negative” share price reaction, Citi doesn’t expect the leadership change to affect WiseTech’s near-term earnings outlook.
Citi Analyst Siraj Ahmed said: “We do think the board and Richard White have come to a solution whereby governance and strategy have been effectively separated. We upgrade to buy with a new target price of $124.50 – down 10% as we moderate our long-term growth forecasts.”
Morningstar analyst Roy Van Keulen lowered his fair value estimate to $105 per share but said, “Although we consider the new role to be a demotion and a strong signal from the board, we expect White will be able to continue driving the CargoWise product vision and strategy,”
Van Keulen added: “Given our assessment of WiseTech as a product-led company, we consider White’s continued involvement in this area of the business to be a positive outcome for shareholders.”
Goldman Sachs (NYSE:GS) analyst Kane Hannan also noted a buying opportunity for the logistics software giant, raising his recommendation from neutral, with a price target of $138, representing a 39% increase on WiseTech’s last closing price.
RBC Capital Markets analyst Garry Sherriff described Richard White’s decision to step down as chief executive and director as a “positive development,” though he anticipated White’s continued role at the company.
“We believe that the underlying growth drivers of the business remain intact and relieving White from his managerial responsibilities to focus on product development is a positive step forward in addressing governance issues without outright dismissal of WiseTech’s visionary founder,” Sherriff said.