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What: Shares of health information services provider WebMD (NAS: WBMD) are in triage today, falling as much as 32% after the company took itself off the auction block.
So what: Today was actually a double whammy. First, it was announced that WebMD CEO Wayne Gattinella had resigned and that he'd be replaced in the interim by the company's CFO. Secondly, and most importantly, after failing to find what the company deemed an adequate bidder, WebMD took down the "for sale" sign in its front yard. WebMD will remain an independent company, but warned that slower ad spending from drugmakers and increased competition could cause near-term shortfalls in sales and earnings.
Now what: Today's move lower might seem like an overreaction at first, but it could be just the beginning. Slated to grow sales at just 1% in 2012, WebMD's profit forecast has fallen by more than a quarter in the past three months, according to estimates on Yahoo! Finance. That places WebMD at a not-so-thrifty 29 times forward earnings, which is clearly more than I'd feel comfortable paying with the company's future so uncertain.
Craving more input? Start by addingWebMDto your free and personalized watchlist so you can keep track of the latest news with the company.
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