RumbleON Inc (MCE:RMBL) stock fell sharply in Friday pre-market trading after CEO Marshall Chesrown resigned with immediate effect amid an investigation into allegations against him.
The motorcycle dealer and eCommerce platform said in an 8-K filing to the US Securities and Exchange Commission (SEC) on Thursday that before his departure the company was advised of certain allegations surrounding Chesrown’s use of company resources. Chesrown will remain a director of the company, it added.
“The independent directors take all such allegations seriously and have hired independent counsel to assist in an investigation, which is ongoing,” RumbleOn said.
“The company has made no determination regarding the allegations and there have been no releases or other agreements with Mr Chesrown as of the date of this filing.”
In a statement early Friday, the company announced it has appointed Mark Tkach as interim CEO. Tkach is co-founder of the RideNow powersports group, acquired by RumbleOn in 2021, and a major shareholder of the company, it added.
Tkach and William Coulter, another former director, own about 32% of RumbleOn’s Class B shares and have been critical of governance at the company, including the combined CEO/chairman role.
The company said it has also reached an agreement in principle to resolve all outstanding proxy matters ahead of its annual meeting of shareholders in July, bringing to a close a proxy battle that has plagued the company for the past few weeks.
These include Tkach’s appointment to the board, as well as the appointment of Steve Pully as chairman.
“We thank Mr Tkach for his willingness to assist during this time of transition and are confident that his deep knowledge and experience in the powersports industry will provide enhanced opportunities for operational excellence as the company works to identify a permanent successor,” Pully said.
Shortly before the market opening, RumbleOn’s shares were down 7.3% at $9.17, taking losses since June 5 to 29%.
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