The Humm Group Ltd (ASX: HUM) share price is plunging amid news five members of the company’s six-person board have resigned in the wake of the termination of a planned $250 million sale.
The sale was vehemently opposed by Humm founder, director, and largest shareholder Andrew Abercrombie – who the resigning members of the board now reject working beside.
The Humm share price plunged almost 4% to 50.5 cents in early trading today before regaining ground to 51 cents at the time of writing.
For context, the broader market is in the green on Wednesday. The S&P/ASX 200 Index (ASX: XJO) is currently up 0.168% while the All Ordinaries Index (ASX: XAO) has gained 0.12%.
Let’s take a closer look at what might be weighing on the finance and buy now, pay later (BNPL) provider’s stock today.
The Humm share price is sinking on Wednesday. Its tumble comes after the company announced its chair and all directors – except Abercrombie – are stepping down.
It follows last week’s news that the sale of Humm’s BNPL business to Latitude Group Holdings Ltd (ASX: LFS) had fallen through. Its termination was said to be due to “major disruption in financial markets”.
“The events leading to the termination of the proposed sale of Humm Consumer Finance to Latitude Group Holdings Ltd (ASX: LFS) … have caused the majority directors of Humm … to conclude that they cannot remain on the board of directors with Andrew Abercrombie,” the company said in a release to the ASX this morning.
The release detailed the immediate resignation of directors Alistair Muir and John Wylie.
Meanwhile, Humm chair Christine Christian and directors Carole Campbell and Rajeev Dhawan will resign when replacement directors are appointed.
The company noted the gradual handover would allow the company to “deal with the challenges and opportunities ahead”.
Abercrombie labelled the now deceased deal – that would see the company’s BNPL leg sold to Latitude – a “dud” and “nothing but a garage sale”.
That’s despite Humm noting the business hadn’t turned a profit in 2022 and risks the company’s share price.
Board unanimous ‘excluding one lone dissenting director’
The board further outlined its position regarding the failed sale in a letter to shareholders last night that accused Abercrombie of undertaking “a strident campaign against the proposed sale”. The board went on to say:
The majority directors have been prepared to act to secure [the sale] despite multiple aggressively worded private threats of legal action against us personally from Andrew Abercrombie.
[T]his was the entire board of highly experienced people acting unanimously in all these decisions, excluding one lone dissenting director.
Humm’s stock has struggled this year. It has fallen 45% year to date. It’s also 50% lower than it was this time last year.
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