Shares of Alcoa Corp. slumped to a multiyear low Monday as the aluminum company said that Roy Harvey had been replaced as chief executive officer after seven years in the role.
The company named William Oplinger as president and CEO, effective Sunday. Oplinger had served as Alcoa’s chief operations officer since February and before that as chief financial officer since November 2016.
Alcoa’s stock
AA,
-5.20%
dropped 5.1% in morning trading. That put it on track for the lowest close since March 1, 2021. It has tumbled 18% over the past three months and plunged 40.8% year to date, while the S&P 500
SPX
has rallied 12.8% this year.
“In our opinion, investors have expressed concern around cash flow and the company’s medium to long-term outlook,” B. Riley analyst Lucas Pipes wrote in a note to clients. “While the timing of the transition is somewhat unexpected, we believe Mr. Oplinger is the most well-positioned candidate for the CEO role.”
Harvey had been CEO since the company completed its separation from Arconic Inc. in November 2016. Arconic was acquired by Apollo Global Management Inc.
APO,
+1.55%
in a deal that was completed in August 2023.
“The transition of the president and CEO roles reflects the company’s succession planning process,” Alcoa said in a statement.
“Our board believes Bill’s extensive experience with Alcoa makes him well-positioned to carry the company forward,” said Steven Williams, Alcoa’s board chair.
B. Riley’s Pipes said that as Alcoa has faced challenging aluminum markets in recent quarters, and given the troubles associated with approvals of mine plans in Australia, he believes the change in leadership reflects the company’s desire to reposition its asset base for stronger cash-flow generation.
“While Mr. Harvey has successfully transformed Alcoa in recent years, particularly as [Alcoa] has aggressively deleveraged, we believe the transition will be viewed favorably by investors,” Pipes wrote.
