Shares in alternative milk company a2 Milk had recovered some ground but were still weak after the surprise announcement that managing director and chief executive Jayne Hrdlicka would step down, having spent less than 18 months in the job.
By 12.30 pm the stock was trading at $14.69, down 48c or 3.1 per cent from Friday's close. The stock had opened sharply weaker at $14.00.
Former chief executive Geoff Babidge has stepped in as interim CEO commencing immediately, a2 Milk said.
Mark Lister, head of private wealth research at Craigs Investment Partners, said the price fall was an undstandable knee-jerk market reaction to the news.
"I guess the negative reaction is the shock factor," he said.
"You have got a stable management team but obviously something behnd the scenes is not working as it should," he said.
"I think that it's natural that the market shoots first and asks questions later," Lister said.
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Hrdlicka's departure will leave Spark's Jolie Hodson as the only woman in charge of an NZX50 company.
The only other woman included in that list is Kate McKenzie, who has already resigned and is set to leave Chorus at the end of the year.
A source suggested there may have been concerns about the direction the company had taken under Hrdlicka's tenure and her interaction with key stakeholders.
That said, before today's news, A2's share price had risen 37 per cent in the past 12 months.
Chairman David Hearn thanked Hrdlicka for the "important contribution" she had made to the company and that it remained confident that the strategic course outlined at the annual meeting would "continue to deliver strong rewards to all shareholders in the future".
"The board recruited Jayne primarily for her ability and experience in developing and implementing strategy, recognising that the company needed to develop a refined strategy for the business to meet the new challenges in the next phase of our development. The board fully endorses the strategy which Jayne and the senior leadership team have developed," Hearn said in a statement.
Hrdlicka said in the statement: "The a2 Milk Company is an extraordinary business and I joined the company excited about the opportunity to help define its full potential and deliver against it. Board and management have worked closely together to chart the future and it is no doubt bright and we are well advanced in executing it. I am delighted with how much progress has been made, the momentum underway in executing the strategy and the strength of the current leadership team."
"The reality, however, is that the next 3-5 years will continue to require the CEO being present in our core markets of China and the US and that combined with running a New Zealand company based in Australia required more travel than I had anticipated when I joined the company," she said.
"The board and I agreed that this next phase is going to be too difficult to manage alongside my other commitments whilst also managing the health and wellness priorities of my family and me.
"My passion and commitment to this great company is unchanged and I will, of course, work closely with the board and new CEO as required to ensure a smooth transition," Hrdlicka said.
Hrdlicka received total remuneration of $2.23m in the 2019 financial year, according to the company's annual report.
Hrdlicka caused a stir last September when she sold about 340,000 shares in a2 Milk for a total of around $4.3m.
Last month she sold a further A$2 million ($2.1m) worth of time-based share rights granted as compensation for the forfeiture of incentive entitlements from her former employer.
Hrdlicka was chief executive of the Qantas unit, Jetstar Group, for five years before she joined A2 Milk in July 2018.
She still retains 95,338 shares in the company with a market value of approximately 85 per cent of her fixed annual remuneration before tax, as well as 410,099 performance rights received under the long-term incentive plans for the 2019 and 2020 financial years.