- Everbridge said late Thursday that CEO David Meredith is resigning after over two years at the software company.
- The stock lost almost half its value on Friday, erasing all of its gains from Meredith's tenure.
- Everbridge said it has initiated the search for a new CEO and in the meantime has put two executives in charge.
Shares of Everbridge lost almost half their value on Friday after the software company said CEO David Meredith resigned effective immediately.
Everbridge, whose technology helps companies manage public safety emergencies, saw its stock price rocket during the early months of the Covid-19 pandemic as cities across the country deployed its software to get notifications out to the public.
Investor sentiment turned dramatically in November, as the stock plunged 29% for the month. The drop started after the company's earnings report on Nov. 9. Despite reporting better-than-expected sales for the third quarter and issuing an optimistic revenue outlook, the shares fell 13% the next day and then declined for nine more consecutive days.
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Still, Meredith's sudden departure comes as a shock and without explanation.
"Mr. Meredith's resignation is not related to any matter regarding the Company's financial condition, reported financial results, internal controls or disclosure controls and procedures," Everbridge said in a press release on Thursday, after the close of regular trading.
An Everbridge spokesperson declined to comment beyond what was stated in the release.
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 a search for a permanent CEO "and will consider both internal and external candidates."
Meredith joined Everbridge in mid-2019 after spending over two years as operating chief at Rackspace. As of the end of October, the stock had climbed 63% during his tenure. Following the announcement of his departure, it's now down about 37% since he was named CEO.
Everbridge reiterated its guidance for the fourth quarter and said it anticipates revenue growth of 20% to 23% in 2022. That's lower than the 24% growth expected by analysts, according to a Refinitiv survey.
Analysts at Stifel downgraded their rating from buy to hold after the announcement.
"The timing and uncertainty around the circumstances of Mr. Meredith's departure combined with the company's guidance introduces a high degree of uncertainty into the story in the near term," they wrote. "We are moving to the sidelines while we digest the disruption Mr. Meredith's departure will have on the company's operations and assess the potential changes made to the business under its new Co-CEO's and future leadership."
Everbridge shares closed down 45% to $63.