Congratulations Ray Elliot, you're clearly more popular than the last guy. Too bad this was how we had to find out.
In contrast to Elliot's predecessor Jim Tobin, who saw shares of Boston Scientific (NYSE: BSX ) rise 5% when he announced he was stepping down from the CEO post, shares of Boston Scientific fell 9% yesterday when Elliot followed suit.
Elliot was supposed to be able to turn things around at Boston Scientific. But less than two years after he took the helm, he's jumping ship -- sort of, he'll remain on the board -- with shares down about 25%, despite a 45% increase in the S&P500.
Stock price aside, I wouldn't say that Elliot's tenure was a failure. He sold off nonessential units, like its neurovascular unit that went to Stryker (NYSE: SYK ) , and brought down debt that the company took on from the over-priced purchase of Guidant.
Elliot couldn't work the magic like he did at Zimmer Holdings (NYSE: ZMH ) , but I think that was mostly a product of the difficult turnaround candidate he got stuck with. Product recalls and serial restructuring don't just fix themselves overnight.
Elliot plans to stay on to help find his replacement. One person that won't be available for the job is Omar Ishrak, CEO of General Electric's health care systems business. He took the CEO job at Boston Scientific's rival Medtronic (NYSE: MDT ) today. The change wasn't a big surprise -- Medtronic's current CEO William Hawkins said that he planned to step down last December -- but it does take a potential candidate off the table.
Can a new CEO move the stock? Who knows. Boston Scientific remains a show-me company. My suggestion is to forget trying to grab the as-yet-elusive bottom, sacrifice some of the upward trend when it does finally turn around, and buy once it's proven it has some legs.
Until then, add Boston Scientific to My Watchlist.