Why Redwire Corporation Stock Just Crashed
Key Points
Redwire stock is switching CFOs -- in November.
One big Redwire stockholder just filed to sell off nearly 10 million shares.
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Redwire Corporation (NYSE: RDW) plunged 7.5% through 11:11 a.m. ET Thursday after the space infrastructure stock announced (yesterday) its CFO Jonathan Baliff will retire, to be replaced by current chief accounting officer Chris Edmunds, at the end of November.
But that was only the first shoe to drop.
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In a separate announcement, filed with the SEC yesterday, Redwire advised one of its biggest shareholders, "BCC Redwire Aggregator, L.P.," which owns more than 10% of Redwire, intends to sell off nearly 10 million Redwire shares.
Image source: Getty Images.
Redwire's big sell-off
According to the filings, the "aggregate market value" of shares being sold works out to $11.22 per share, but TheFly.com reports the shares will actually be sold for approximately $10.15 per share.
Assuming the $10.15 price is the correct one, this suggests someone's taking a significant haircut in order to exit Redwire stock in a hurry. Other investors seem to be following suit, as Redwire's current share price sits within just a few pennies of the reported $10.15 sales price.
Is Redwire stock a sell?
Is there reason for investors to worry? Maybe, but also maybe not.
On the one hand, the circumstances of the CFO switcheroo -- early announcement, nearly two months before Baliff's departure, and the former CFO sticking around through December to help smooth the transition -- doesn't suggest any financial shenanigans or an executive firing. To the contrary, everything looks above board and shipshape.
Moreover, Redwire's numbers -- while not great -- don't look scary either. Analysts polled by S&P Global Market Intelligence are seeing sales up 39% this year, and perhaps 39% more next year. Free cash flow looks like it could turn positive in 2026, and GAAP profits might arrive in 2027.
To me, today's sell-off almost looks like a buying opportunity.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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