The Magellan Financial Group Ltd (ASX: MFG) share price is slipping amid reports of a rift among the company’s management and potential class actions.
The claims of clashing management follow from the resignation of the fund manager’s long-term CEO, Dr Brett Cairns earlier this month. Of course, fallout rumours are likely the least of the company’s worries.
As my Foolish colleague, Michell Lawler reported yesterday, $1.8 billion was dropped from its market capitalisation on Monday following the loss of a major client.
That could lead to even more pain for Magellan in the future, according to some publications.
At the time of writing, the Magellan share price is $20.09, 2.29% lower than its previous close.
Let’s take a look at what’s being reported on the now-embattled company.
Magellan share price sliding again on Wednesday
The Magellan share price is sliding once more this morning, ditching some of yesterday’s much-needed gains.
The dip comes amid reports from The Australian claiming the company’s board was concerned by its former CEO’s management style prior to his departure.
Additionally, the publication states there may have been a fallout between Cairns and Magellan chair and founder, Hamish Douglass. The company reportedly denied the assertions.
It also flagged the potential financial effect of Douglass’ separation from wife, Alexandra.
The Australian noted it could cause “a liquidity event” for the company. That’s despite the pair stating they have no intention to sell their shares in the company.
On top of that, after the market closed yesterday, The Age reported class actions might soon come the company’s way.
It stated lawyers from class action specialist firms Phi Finney McDonald and Quinn Emanual were eying recent goings-on at Magellan.
The Age quoted Phi Finney McDonald principal lawyer, Tim Finney as saying:
[C]ertainly given the allegations of inconsistent disclosures, combined with the price reaction, it is certainly a matter that could well result in a securities class action in my view.
Today’s dip sees the Magellan share price 62% lower than it was at the start of 2021.
It has tumbled 41% this week alone.
The post Magellan (ASX:MFG) share price flops as fresh talk of turmoil at the top emerges appeared first on The Motley Fool Australia.
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More reading
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- Magellan (ASX:MFG) shares just lost $1.8b of market cap. What now?
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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