Is this the contrarian opportunity of the year?
MongoDB lost over $6 billion in value in one day, even though not a single comma in its financials changed. The person who knew the company best left—and left on the table a package tied to the stock's growth. A fitting punishment, or a contrarian opportunity?
Key points
MongoDB lost over $6 billion in a single day without a single digit in its financials changing.
The outgoing CEO left behind a stock package worth $32.5 million tied to target prices through 2030.
The resignation came the day before an investor day where he was supposed to present the company's long-term strategy.
The latest quarter was the best in recent years, with revenue up 30% and contracted backlog up 91%.
The average price target of 41 analysts sits tens of percent above the current price, yet banks remain sharply divided.
Six billion dollars for one business card
On Friday, September 25, MongoDB $MDB stock closed at $410.44. On Monday it opened at $310.94, $99.50 lower, was at one point 26% below Friday's close, and ended the day at $334.68, down 18.46%. With roughly 82 million shares outstanding, more than $6 billion in market value vanished, and the company's market cap fell to around $27 billion.
What happened? Nothing you'd find in the financials. The company simply announced that CEO Chirantan "CJ" Desai was leaving for Meta $META and that his predecessor Dev Ittycheria would return to the helm on an interim basis. In the same release, it confirmed its full-year revenue outlook.
The timeline of the SEC filings is remarkable. Desai announced his resignation on Thursday, September 24, the board appointed Ittycheria on Saturday, September 26, and the market learned of it Monday morning. One day before the long-planned investor day, where Desai was to present the long-term strategy.
It was also the second blow in a month. On September 2, the stock fell 13.5% because cloud service Atlas grew 28.9% instead of the expected roughly 30%. Revenue, meanwhile, beat estimates. MongoDB is being punished for doubts, not for numbers.