Huge setback incurred by Wise, the fintech company, as its shares plummeted after the announcement that its Chief Financial Officer (CFO) is stepping down, and the Chief Executive Officer (CEO) will go on a leave of absence.
The company, which facilitates international money transfers, made the announcement on Friday. This news had a negative impact on the share prices, which fell nearly 10% at the open.
The CFO’s departure was effective immediately, and the CEO will be away for an undisclosed amount of time.
Wise’s spokesperson stated that the CEO’s leave of absence was for ‘personal reasons” and there is no indication of any wrongdoing.
However, the sudden resignation of the CFO has raised some concerns among analysts.
This announcement comes as Wise has already faced a decline in share prices over the last few months. The company went public in July of last year and has since seen its stock slide significantly.
The company’s shares, which were priced at 800 pence per share for its Initial Public Offering (IPO) in London, struggled to maintain this price in the months following the IPO.
In February this year, Wise’s share price had fallen to 515 pence per share.
The company’s latest setback may have deepened concerns among investors, and the share price has fallen 23% in the last quarter.
Wise’s spokesperson stated that the company remains committed to delivering its services as usual, and it is confident in its long-term growth strategy.
Wise has been in the news lately due to its involvement in a legal battle with the UK’s financial regulator.
In March, the company filed a legal challenge against the Financial Conduct Authority (FCA) over what it called an unfair requirement to hold more capital than its US rivals.
Wise claims that it is subject to regulations that are more strict than its competitors. The company has requested that the FCA reconsider its decision and create a level playing field for all companies operating in the UK financial services market.
The company’s spokesperson confirmed that the legal challenge is still ongoing.
Wise’s services have been in high demand during the pandemic as more people turned to digital services for their money transfer needs.
In its latest earnings report, the company reported a 54% increase in revenue for the year ending March 2021, reaching £421 million. The company also reported a net profit for the first time, of £10.3 million, compared with a loss of £14.2 million the previous year.
However, Wise’s recent struggles have impacted its future growth prospects. The company warned in its February earnings report that its growth rate may slow in the near future due to the pandemic and increased competition.
The recent developments of the CFO stepping down and the CEO’s announcement of taking leave has raised more doubts about the company’s future prospects.
Despite this, Wise’s spokesperson has assured investors that the company is committed to its long-term growth strategy and delivering its services as usual. The spokesperson also emphasized that the company’s services remain in high demand and that Wise believes it has many opportunities for growth in the future.