Globus Medical (NYSE: GMED) stock is down more than 11% today, a day after the musculoskeletal repair tech company announced the surprise resignation of its CEO.
Dave Demski said in a news release that he was stepping down as CEO to pursue other opportunities, with the board promoting Chief Commercial Officer Daniel Scavilla into the corner office.
GMED shares were down more than 11% at $69.85 apiece in morning trading today.
The surprise CEO transition came as the company announced it expects to report roughly $230.5 million in sales for the quarter ended March 31, 2022, up 1.4% from Q1 2021. The Street had expected nearly $236 million in revenue. (Globus Medical plans to announce first-quarter results after the market closes on May 10.)
BTIG analysts related that Demski said in a conference call after the resignation announcement that he had nothing specific lined up, just that it was time to step aside and seek a new challenge.
“With FY22 guidance reaffirmed and GMED’s commentary on its Enabling Tech pipeline robust into 2Q, it would seem the business is on solid footing. Still, we think investors will be left wanting a little bit more as to why now? The CEO change serves as an unneeded distraction and added fuel to the 1Q miss,” said BTIG’s Ryan Zimmerman and Phillip Dantoin, who stuck by their Buy rating on Globus Medical stock.
David Saxon, senior research analyst at Needham & Co., also stuck with a Buy rating: “Management noted procedure volume trends improved in March, which has continued into April. While GMED noted a strong robotics pipeline entering 2Q22, our sense is that a large part of the 1Q22 revenue shortfall is due to weakness in Enabling Technologies.”