David Meredith, CEO, Everbridge
Scott Mlyn | CNBC
Shares of Everbridge lost nearly half its value on Friday after the software company said CEO David Meredith resignation effective immediately.
Everbridge, whose technology helps companies manage public safety emergencies, saw a share price rocket during the early months of the Covid-19 pandemic as cities around the country rolled out their software to make announcements available to the public.
Investor sentiment changed dramatically in November, when stocks fell 29% for the month. The drop started after the company’s earnings report on Nov. 9 though Report With better-than-expected sales for the third quarter and an upbeat revenue outlook, the stock fell 13% the next day and then fell for nine straight days.
However, Meredith’s sudden departure came as a shock and with no explanation.
“Mr. Meredith’s resignation is unrelated to any issue with respect to the Company’s financial position, reported financial results, internal controls or disclosure and procedural controls.” , Everbridge said in a press release on Thursday, following the close of regular trading.
An Everbridge spokesperson declined to comment beyond what was stated in the statement.
Everbridge said Chief Financial Officer Patrick Brickley and Chief Revenue Officer Vernon Irvin will become interim co-CEOs “to assume strategic and operational control of the business.” The company said it has begun looking for a permanent CEO “and will consider both internal and external candidates.”
Meredith joined Everbridge in mid-2019 after more than two years as chief executive officer at Rackspace. As of the end of October, the stock is up 63% during his tenure. Following the announcement of his departure, it is now down about 37% since he was appointed CEO.
Everbridge under Meredith
CNBC
Everbridge reiterated its guidance for the fourth quarter and said it predicts revenue growth of 20% to 23% in 2022. This is lower than the 24% growth analysts expected, according to a report. survey by Refinitiv.
Analysts at Stifel have downgraded their ratings from buy to hold following the announcement.
“The timing and uncertainty surrounding the circumstances of Mr Meredith’s departure combined with corporate guidance lead to a high degree of uncertainty in the narrative for the foreseeable future,” they wrote. “We are moving aside as we announce the disruption that Mr Meredith’s departure will have on the company’s operations and assess the potential changes made to the business under leadership of the new and future Co-CEO.”
Everbridge shares closed down 45% at $63.
