Rolls-Royce Holding PLC (LON: RR) have seen their shares dip on Tuesday, as the firm told the market that the executive of their largest shareholder had departed.
Shares in Rolls Royce dipped 3.14% to 702p. 10/12/19 10:47BST.
The firm said that announced that an executive from its largest shareholder, activist investor Value Act Capital, has resigned from from the engineer’s board.
Bradley Singer, stepped down this morning. He is chief operating officer of Value Act.
When Singer joined the board, chairman Ian Davis said he would stay on as long as Value Act remained a significant shareholder.
Singer said: “Since I joined the board nearly four years ago, Rolls-Royce has undertaken many significant initiatives and faced challenges head-on.”
Value Act own a 10% stake in Rolls Royce who are a FTSE100 listed firm.
Rolls Royce will have to make a concerned effort to ensure that their share price does not end up in free fall.
The global automotive market has seen slumps over the last few months, which has been caused by Brexit complications and other external market shocks.
Competitors in the industry have been quick to make moves, and Rolls Royce have certainly been put under pressure with recent news.
Rivals such as Honeywell (NYSE:HON) have seen their shares in red back in October, as the firm fell short of estimates by analysts in its latest update, as a result cutting their annual targets.
Certainly shareholders of Rolls Royce will not be best impressed following the sudden departure this morning.
However, the firm has shown a resilient nature in the past to be able to fight slumps and competition to operate in the engine, which may leave shareholders optimistic.
Strong demand has come from firms such as Boeing which may mean that shareholders of Rolls Royce see long term benefits.