Phoenix Motor Inc (NASDAQ:PEV) has announced the immediate suspension of its Chief Executive Officer, Xiaofeng Denton Peng, following the establishment of a special committee by the Board of Directors on Thursday. The committee will investigate allegations against Mr. Peng, including a breach of fiduciary duty and unauthorized related party transactions that may have negatively impacted the company and its minority shareholders.
Central to these allegations is a guarantee made by Phoenix Motor on March 6, 2024, to secure a debt of $14.98 million for SPI Energy Co., Ltd. (Nasdaq: SPI), where Mr. Peng also serves as CEO. The Board of Phoenix Motor contends that this action was taken without authorization and is seeking to address potential harm caused to the company's stakeholders.
In response to the suspension, Phoenix Motor's former Chief Financial Officer, J. Mark Hastings, has been appointed as interim CEO. Mr. Hastings will serve in this capacity while the investigation is ongoing, with the company committing to provide a further statement upon its conclusion.
This move reflects the Board's commitment to corporate governance and the protection of its shareholders. The investigation's findings will likely have significant implications for Mr. Peng's future with the company and could potentially influence Phoenix Motor's strategic and financial direction.
The information provided in this article is based on a recent SEC filing by Phoenix Motor Inc.
InvestingPro Insights
Phoenix Motor Inc (PEV) has recently faced significant challenges, reflected in several key metrics and market indicators. As the company navigates through corporate governance issues, here are some insights based on real-time data and InvestingPro Tips:
InvestingPro Data indicates a market capitalization of $15.37 million USD, which is relatively small, suggesting the company could be more susceptible to market volatility. Additionally, the firm's revenue has seen a substantial decline, with a decrease of 27.9% over the last twelve months as of Q4 2023. This is compounded by a gross profit margin of -8.84%, indicating that the company is not only making less money but also earning less on each dollar of sales.
InvestingPro Tips highlight that Phoenix Motor Inc is currently trading at a high revenue valuation multiple and has been quickly burning through cash. These factors, coupled with the recent suspension of its CEO, could further dampen investor confidence. The Relative Strength Index (RSI) suggests that the stock is in oversold territory, which may interest some investors looking for a potential rebound. However, caution is advised given the company's current financial health and recent management upheaval.
For investors seeking a more in-depth analysis, there are over 10 additional InvestingPro Tips available at https://www.investing.com/pro/PEV. These tips could provide a more comprehensive view of the company's financial standing and market position. Remember, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which could be a valuable tool for making informed investment decisions during these turbulent times for Phoenix Motor Inc.
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