The market has been left stunned by the news that FTSE 250 data centres operator Telecity (TCY) is losing its respected and long-standing chief executive officer (CEO) Michael Tobin. Having been the driving force behind the co-location data centres company for more than a decade it is perhaps understandable that investors have been left in a cold sweat, marking the shares 6% down to 716p.
'The company announces that Michael Tobin is to step down from the role of CEO and will leave the company following a period of handover on 31 October 2014,' today's statement reads.
That's barely two months from now and it'll be left to chairman John Hughes to take the executive reigns until the right replacement can be recruited.
'Telecity has announced the sad (and pretty abrupt?) departure of Mike Tobin from the CEO role,' says Panmure Gordon technology analyst Adam Lawson. 'We say sad because, for all his humility, Mike was a character and plc land needs characters.'
But the timing may not be quite so surprising. For the most part of the last decade Tobin has pushed Telecity along a high-growth land grab as both business and consumers increasingly embrace the cloud and off-premise data storage mushrooms.
But Telecity is maturing fast, and faced with pricing pressures in an increasingly competitive space, investors are demanding that the business better sweats its data centre assets and uses capital expenditure (capex) more judiciously, as Shares pointed out recently. Perhaps Tobin has decided that he is not best-placed to steer this next phase of development.
'Michael Tobin has helped to grow Telecity into the leading premium data centre provider in Europe, creating a highly valuable business with a great future and delivering significant returns to shareholders,' eulogises Hughes.
Investors have certainly done pretty well out of the business considering it IPO'd in 2007 with a market value of £436 million. Today Telecity is worth in excess of £1.4 billion, even after today's share price slump.
'When I heard the news of Mike Tobin's resignation this morning, I wasn't quite as surprised as others,' wrote IT veteran and founder of IT consultancy TechMarketViews, Richard Holway. 'There had been rumours of disagreements between Mike and others on the Telecity board for some time, some centring around the return of capital to shareholders.'
Holway adds that Tobin's management style might not always appeal to everyone, which often paints him as a management maverick. 'But people, including his staff, really love him, following him to the depths of the sea and the peaks of mountains regardless of the risk,' says Holway.
'A search is already underway but a strong character will be required to fill the hole left by Mike’s big personality,' says Panmure's Lawson. In the meantime, 'his departure will be a very unsettling time for everyone, staff, clients and shareholders,' concludes Holway.