Shares of WebMD (NASDAQ: WBMD) plunged as much as 32% Tuesday after the medical information website said its chief executive has resigned and that revenue for 2012 would be lower than expected.
WebMD also said it was no longer seeking a buyer.
Shares fell to 25.01 in early Tuesday trading from Monday's closing price of 36.73. The company's stock has struggled to regain altitude after plummeting last July when it reduced its forecast for 2011.
That challenge just got a lot harder, for shares were trading Tuesday as low as 25.01 after closing Monday at 36.73.
WebMD announced in a press release Tuesday that Wayne T. Gattinella has resigned from his positions as CEO, president and board member.
No reasons were given for the resignation, but if I had to take a wild guess, I'd say it had to do with the lowered guidance. Here's what the company warned investors about:
WebMD's preliminary outlook for 2012 is that revenue may be as much as 2% to 8% lower than 2011 revenue, with revenues declining more in the first half of the year and improving in the second half of the year.
The company anticipates the lower revenue "as certain of its pharmaceutical company customers manage the effects of their products losing patent exclusivity," which WebMD says will result in lower spending on marketing.
It says it anticipates the situation will improve later in the year because of an "increase in the number of new branded pharmaceutical product introductions as a result of regulatory approvals expected" in the second half of 2012.
Rule of thumb: When your revenue comeback plan hinges on "regulatory approvals expected," your fate is not in your hands, and investors seem to recognize this.
Anthony Vuolo, WebMD's CFO and COO, will serve as interim chief executive while the board conducts a search for a permanent CEO.
The company is scheduled to report fourth-quarter results on February 23. In November it reported net income of $14.2 million, or 24 cents a share, up from the $13.6 million and 22 cents a share in the year-ago quarter. But revenue slipped to $135.1 million from $135.3 million.