While enjoying my Sunday coffee, I had a thought about AGY: it...

While enjoying my Sunday coffee, I had a thought about AGY: it seems like JZ might be getting ready to step down. The current situation at AGY reminds me a bit of what happened at GXY during its rough patch in the last downturn. Back then, Simon Hay was brought in as CEO and soon after, cleared the books with a large impairment, essentially starting fresh from an accounting perspective. Here, it looks like the process might be happening in reverse—JZ is still around and has created the impairment, but his successor, James Shay, is already in place and ready to go.

It seems odd that James was appointed as COO just before the company went into care and maintenance. There's been no clear explanation for the creation of this role, except for James’ experience in the lithium sector. However, given that Puna Mining already has a COO (Luis, Pablo’s son-in-law), and with no other operations to oversee—Tonopah being inactive—James’ appointment seems to suggest he’s being prepped to take over from JZ.

From a personal standpoint, this would make sense for JZ. He can’t offload his ~70 million shares without disclosing the sale as a director, which would tank the share price. But his stake is under the 5% threshold that requires a substantial holder notice. So, if he steps down as a director, he could start selling shares gradually without much market disruption. He might not sell them at all and instead wait for the next upturn, but resigning as MD at least gives him the flexibility to sell if he wants to. It would also allow him to maintain his reputation, bailing out before things potentially get much worse (if that's possible).

I’d be keen to see James Shay’s remuneration details, including any performance options, and whether they vest upon a takeover like Simon Hay’s did. If James has substantial incentives that kick in during a takeover, it might point to him being positioned as the one to steer AGY through a sale. JZ could exit gracefully, perhaps citing personal reasons, while James could facilitate a quick sale to a predatorial Chinese buyer like ATL, leaving shareholders with minimal returns, but leaving himself with a pretty decent remuneration package for a few months work (just like Simon Hay).

Of course, this is just my speculation over coffee, and I could be wrong. But I wouldn’t be surprised if JZ steps down in the next six months or so, or at least before the next AGM. Everything seems to be falling into place for it.