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What: Shares of Chilean fertilizer company Sociedad Quimica y Minera de Chile (ADR) , also known as SQM, have plunged as much as 32% after three board members suddenly resigned.
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So what: Three board members who represented fertilizer giant PotashCorp resigned as a campaign finance scandal widened. Chilean authorities are investigating whether or not money from SQM made its way into political campaigns. The scandal has already led to SQM firing its CEO and the resignation of Potash board members is a sign that the Canadian company wants to distance itself from any scandal.
Now what: This is just the latest political scandal to hit Latin America, which has become a nightmare for U.S. traded companies of late. We don't know much about SQM's actual involvement in funding political campaigns but the investigation has to be troubling for investors. I wouldn't be jumping into shares of SQM on this news, but I do view the resignations as a slight positive for Potash. The company is making moves to distance itself from its 32% stake in SQM, which is the right move and doesn't take away any potential upside if SQM's shares recover long-term.
The article Why SQM's Shares Plunged 32% Today originally appeared on Fool.com.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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