Shares of Lifeway Foods ( LWAY -0.19% ) By 10:35 a.m. ET on Tuesday morning, the stock had surged by 44% following some significant announcements made by the board.
Earlier today, Ludmila Smolyansky, the former chairperson of the company, and her son Edward Smolyansky, the former COO, revealed that they have submitted a “consent statement” to the Securities and Exchange Commission. SEC The mother and son are launching a campaign named “Life Back to Lifeway” with the goal of removing their daughter/sister, Julie Smolyansky, from her role as CEO.
According to the company’s website, the Lifeway journey started in 1986 when Michael and Ludmila Smolyansky moved to the United States from the former Soviet Union and started producing Kefir in the basement of their home in Skokie, Illinois.
What is happening specifically at Lifeway?
As per the press release, a mother and her son are planning to oust Lifeway’s current board members and CEO to address the persistent issues in corporate governance and enhance returns for shareholders. They believe the company has been operating passively and advocate for a new leadership style focused on promoting growth and innovation rather than personal interests.
The PR lacks detailed information and does not mention the specific changes the duo plans to implement to improve the company. These specifics could be outlined in the “consent statement,” but as of now, this statement is not available on the SEC’s website.
Should Lifeway stock be sold?
In essence, we are witnessing an effort to overthrow the current boardroom leadership, which appears to be well received by investors. The key question is, what is the reason behind this happening at this particular time?
While Lifeway’s stock has remained relatively stable between $10 and $11 per share over the last year, the company’s recent Q2 financial report revealed positive results. Sales increased by 25% compared to the previous year, and per-share earnings saw a 19% growth.
So far this year, Lifeway stock, which has no debt, has seen a 22% increase in sales and higher profits. 58 Those figures are not indicative of a newcomer, and do not suggest that the company is running on “autopilot.”
In reality, Lifeway’s stock seems to… It appears to be a purchase. .
Editorial note: This article has been rectified.
