Michael Coppola, CEO of Advance Auto Parts, resigned abruptly on Monday after almost three years on the job to "pursue other opportunities". While not uncommon for executives find the grass greener on the other side, the circumstances surrounding the resignation make it seem as though he was pushed out.
Just last week he was presenting on a roadshow and in February he was granted the option to purchase a little over 13,000 shares of stock. And as a company, AAP prizes stability. There's something fishy about the whole thing.
With Advance scheduled to present earnings on 5/17, it seems as though there may be a bit of a nasty surprise lying in wait. Mr. Coppola had previously been a grocery executive, where presentation and merchandising were king. He embarked on an aggressive campaign to remodel most of the chains stores in an effort to make them more visually appealing, but there are no indications that it actually helped sales.
At this point, I would not be surprised to hear that sales are off and that the significant expense of the remodeling has had a negative impact on the bottom line when Q1 earnings are announced. If you are a long-term holder of the stock, I wouldn't suggest selling as I believe share prices will bounce back, but now might be a good time to short and pick up a few extra dollars. This would definately be a short term trade.
$41.8 (05/10/07)
