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Shares of Chemours Co. were suffering a record selloff Thursday as investors learned that the accounting issues they were made aware of two weeks ago were much worse than they had realized.
The issues were bad enough that the specialty materials and chemicals company said it placed its chief executive, chief financial officer and principal accounting officer on administrative leave pending an internal investigation into accounting practices and controls.
As a result of the investigation, the company said it needed to again delay the release of its fourth-quarter results and to push back the filing of its annual report.
The stock
CC,
dropped 31.6% in afternoon trading, toward the lowest close since September 2020. It was also on pace for the biggest one-day selloff since it was spun off from DuPont de Nemours Inc.
DD,
in July 2015.
On Feb. 13, the stock tumbled 12.6% after the company said it would have to postpone the reporting of fourth-quarter results by two weeks while it evaluated its financial-reporting controls.
The internal review, overseen by the company’s audit committee and with help from outside counsel, includes a look at reports made to the Chemours ethics hotline, practices for managing working capital related to impacts to executive incentive plans, “one or more potential material weaknesses” in controls over financial reporting and the “tone at the top” set by senior management.
Meanwhile, CEO Mark Newman, CFO Jonathan Lock and PAO Camela Wisel were placed on leave. Chemours said it named Denise Dignam, the current president of the Titanium Technologies unit, as interim CEO and current Chief Enterprise Transformation Officer Matt Abbott as interim CFO.
Separately, the company said it expects to report that it swung to a net loss for the year of $225 million to $235 million, from net income of $578 million. The 2023 results included $746 million in litigation settlements and $153 million in restructuring charges, as well as a $106 million gain from the sale of its glycolic acid business.
Read more about Chemours’ litigation settlements.
Chemours added that it expects to report 2023 net sales that fell 12% from 2022 to $6 billion. The current FactSet consensus is for $6.07 billion.
Chemours’s stock has slumped 37.7% year to date, while the Materials Select Sector SPDR exchange-traded fund
XLB
has gained 2.5% and the S&P 500 index
SPX
has tacked on 6.7%.
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