KIT digital Inc. (KITD) was slumping on Friday, losing more than one-fifth of its value after a management shakeup at the digital-media company, including a new assignment for its chief executive.
Shares of KIT were dropping $1.90, or 23.3%, to $6.25, making it one of the worst percentage decliners on the U.S. market during the final trading session of the week.
Though KIT isn't necessarily a household name, one of the managers involved in the reorganization might ring a few bells for his role as a key player in a decade-old movie about the dot-com boom and bust. That would be Kaleil Isaza Tuzman, whose co-founding and time at the web site govWorks was chronicled in the movie Startup.com.
Isaza Tuzman, the current CEO, will assume the role of chairman. Barak Bar-Cohen, currently chief administrative officer, will become interim CEO while KIT looks for a permanent new chief. KIT said in a press release that the search will be internal and external. The changes will take place at the end of the month.
"The shift to full-time chairman is a step I have been contemplating for some time," Isaza Tuzman said in a statement. "The strategic transaction process, which is underway at the direction of the board's Special Transaction Committee, is at a pace that requires my dedicated focus and energy, separate to the day-to-day running of the company and investor relations responsibilities."
KIT has in the past noted that it has "from time to time received expressions of interest concerning significant investment in, and possible purchase of, our company." Following some of those conversations, KIT's board set up a strategic transaction committee to review the possibilities.
The company, which has executive offices in New York and operational headquarters in Prague, said it has had a plan for some time to change its board composition, in part because of shareholder comments. As a result, KIT is going to replace some of its current directors with new outside members. The company accepted resignations from the board of management members Gavin Campion, Robin Smyth, Chris Williams and Santo Politi.
Prior to Friday's selloff, KIT's 52-week low was $7.38. The stock traded as high as $12.73 in the past year, and the last time KIT was under $7 was the summer of 2009. Volume was much heavier than normal for a stock that usually sees about 863,000 shares a day traded. This time, trading volume was pushing 11 milllion shares.
As noted above, KIT isn't in the headlines every day, but last fall it was on the defensive after becoming the subject of a Heard on the Street column in The Wall Street Journal, titled "KIT Digital Gives Investors Plenty of Drama."
Following the column's publication, Isaza Tuzman said: "Some of the points made -- on our limited history of operating profitably and the need for a business to prove growth credentials over the longer term, for example -- were quite valid. However, the article regurgitated recent gossip, mixed fact and fiction, and ignored our positive accomplishments, all of which was disappointing."