Masimo gains as activist Politan wins two board seats
Shares of Masimo (NASDAQ:MASI) are trading nearly 3% higher early on Friday after activist investor Politan Capital Management, owner of a 9% stake in the company, disclosed its two independent board nominees – Darlene Solomon and William Jellison – were voted in to Masimo’s board during the 2024 Annual Meeting of Stockholders.
The two upcoming directors, and CIO of Politan Quentin Koffey issued a joint statement praising the outcome of the vote, and expressed their “enthusiasm for Masimo’s future as a leading, innovation-focused growth company.”
“We look forward to meeting with, learning from, and working together with the Healthcare and Consumer employees… and would also like customers to know that we will be completely focused on preventing any disruption to their service and support,” the statement continued, adding “We will have more to share soon.”
Weighing in on the development, analysts at Piper Sandler noted that the AGM results don’t come as a surprise, and caution investors to not get overly excited.
They comment: “Next steps beyond the seating of the new Board members will be an update on the status of senior management (will there be voluntary or involuntary exits), as well as insights on 3Q results (a prelim announcement in early October would address open questions regarding whether stronger performance was pulled forward into 2Q)”
Other “potentially influential” areas for the shares, as seen by Piper Sandler, are “the Board’s strategy to separate Consumer, as well as whether the Board embraces a different tact with respect to the ongoing Apple litigation.”
Analysts at Stifel agree: “With the key shareholder vote outcome clear, we suspect attention now will turn to post-AGM MASI leadership, the Healthcare business’ strategic direction and fundamentals, and the possible Consumer separation.”
Analysts believe “this shareholder vote outcome clarifies a major uncertainty about MASI board composition, and lays the groundwork for determining the long-term leadership direction at Masimo.”
Analysts at both firms agree – the vote is an important objective for Politan, but it remains to be seen what effect it will have on the company’s direction, and how much the development will benefit long-term investors.
Stifel and Piper Sandler both call for additional details to be shared in the near-term, as they reiterate their respective “Buy” and “Overweight” ratings, with $170 and $165 price targets on the shares.
Shares of MASI are trading around $115 following the announcement, and are mostly flat YTD.