Alcoa CEO Out and Share Price Tanks in Response
Key Takeaways
- Aluminum producer Alcoa announced that as of Sunday, William Oplinger has replaced Roy Harvey as President and CEO
- Roy Harvey is set to remain on as a strategic advisor to the CEO until the end of the year
- Following the announcement Monday, Alcoa (AA) shares plummeted to their lowest prices since March 2021
This Monday, aluminum producer Alcoa Corp announced a changeover in its leadership effective from Sunday, with former Executive Vice President and COO William Oplinger replacing Roy Harvey as CEO.
The change came somewhat unexpectedly, and Alcoa stated that the reason behind the change was simply that it “reflects the company’s succession planning process.”
Following the announcement, Alcoa shares (AA) fell 6%, accelerating a brutal downtrend and bringing the stock to its lowest price since March 2021.
What are the details of Alcoa’s change in leadership?
Bill Oplinger, 56, had served as Alcoa’s Executive Vice President and COO since February 2023, leading daily operations of the company’s bauxite, alumina, and aluminum assets.
Prior to Alcoa Inc.’s split into two two companies in November 2016, Oplinger had served as its Executive Vice President and CFO since 2013. Following the split, Roy Harvey was appointed CEO, serving until this Sunday when Oplinger was elected to immediately replace Harvey as President and CEO, as well as become a board member. Harvey is set to remain on as a strategic advisor to the CEO until the end of the year.
Steven Williams, the chairman of the company’s non-executive board, said that he and the board believed Oplinger’s extensive experience with the company — having helped build the company since its break-away in 2016 — positioned him well to lead it going forward.
In a press statement, Oplinger expressed his plan to continue “executing on our strategies to create value today while we work on our long-term vision to reinvent the aluminum industry for a sustainable future.”
How has Alcoa’s share price performed in recent months?
Alcoa (AA) shares have been amid a long-term downtrend since its high of $98.09 in March 2022. Since then, as of the time of writing, it has declined approximately 73%.
Lucas Pipes, an analyst from B. Riley, wrote in a note to clients, “In our opinion, investors have expressed concern around cash flow and the company’s medium to long-term outlook. While the timing of the transition is somewhat unexpected, we believe Mr. Oplinger is the most well-positioned candidate for the CEO role.”
Despite the promising CEO appointment, however, Alcoa’s downtrend showed no signs of relenting. Following the announcement, Alcoa’s (AA) share price sank 7.09% from its Friday close of $28.35, to a low on Monday of $26.34. It clawed back a small portion of this drop, closing the day out at $26.63 — the lowest daily close seen since March 1, 2021.
The bottom line
Alcoa has faced challenging aluminum markets over the last two years, having come up against troubles associated with the approvals of mine plans in Australia. The stock market corroborates this view, with Alcoa (AA) shares struggling to recover amid its brutal downtrend.
However, B. Riley’s Lucas Pipes believes that Bill Harvey’s appointment to lead the company reflects the company’s intent to reposition its asset base for stronger cash-flow generation — and that ultimately, the transition will be viewed more favorably by investors. Time will tell whether he’s right, as we keep our eyes peeled for signs that Alcoa’s tides may be turning.
