Why Heidrick & Struggles' Shares Dropped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of executive search firm Heidrick & Struggles fell 17% today after announcing a CEO transition.
So what: CEO L. Kevin Kelly is stepping down as CEO, and Jory Marino will step in on an interim basis while the company searches for a new CEO. Management also said it won't continue to pursue a sale of its business, which is likely the biggest thing weighing on shares today.
Now what: It was only a little over a month ago that management said Heidrick & Struggles may be for sale, so the quick turnaround caught investors by surprise. It's also never a good sign when your leadership goes through big changes, although Kelly is going to stay with the company at a lower level. With shares trading at 20 times forward earnings, and uncertainty for the company going forward, I don't see this as a buy sign right now.
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The article Why Heidrick & Struggles' Shares Dropped originally appeared on Fool.com.Fool contributor 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.