AOL Stock Hits New 52-Week Low

Did advertising sales shake-up spook investors?

Just two days after AOL announced changes to its executive lineup, the company’s stock hit a new 52-week low.

On Wednesday afternoon, shares in the company fell about 6 percent to bottom out at $17.52.

The latest nadir came on the heels of a Monday memo from CEO Tim Armstrong disclosing that the company was transitioning out ad sales chief Jeff Levick and bumping up president Ned Brody to a new chief revenue officer role, in charge of ad sales and other products.

If the company’s falling stock price is any indication, the announcement, which came about a month and a half after AOL’s investor day and two weeks before its quarterly earnings call, appears to have shaken AOL investors.

“The timing of the reorg following the analyst day gives the impression that it was less expected and so close to earnings, when there are already questions about their ability to deliver on full-year guidance numbers,” said Ken Sena, an analyst with Evercore Partners.

Even if AOL meets its revenue targets, it will likely need to cut its cost base to meet the full-year profit goals, but Sena said the company has not indicated that it will do that.

“I believe there’s some skepticism among some AOL investors that they’ll be able to meet their full-year profit goals as a result,” he said.

Concerns about the executive shuffle appear to be an additional drag on the stock.

“One of the big questions is we’ve gone through a year of sales force reorgs, do we want to gear up for another one?” Sena said.

Investors had a chance to hear from the exiting ad chief Levick at AOL’s investor day and built their impressions around his presentation. Some skeptics on the street view his impending departure as a likely signal that targets have not been met, said Sena.

“To the extent that this reorg has changed what investors are expecting, it’s going to spook them on what it likely means for overall growth in branded display,” he said.