Shares of 3D printing systems specialist 3D Systems (DDD 3.80%) fell as much as 10.3% on Friday before closing the day's trading at a loss of 9.6%. The company's president and CEO announced his retirement last night, a move that caught investors by surprise.
CEO Vyomesh Joshi will retire as soon as 3D Systems' board of directors finds a suitable replacement. Even then, Joshi intends to stay connected to the company as a strategic adviser.
Joshi was brought in as CEO in the spring of 2016. Presented as a visionary with three decades of relevant experience near the top of HP's (HPQ 0.08%) printing group, he was tasked with stabilizing a rickety financial structure with stalled sales growth and negative cash profits.
Now he's stepping out after four years at the helm, during which 3D Systems' sales continued to hold steady while free cash flows and EBITDA fell deeper into red ink. This poor performance can be partly pinned on weak industry trends in the 3D printing sector, since archrival Stratasys (SSYS 3.63%) showed similar financial trends across Joshi's tenure.
In any case, 3D Systems struggled over the last four years, and its investors would have been much better off trusting their nest eggs to an index fund tracking the market as a whole. I'm not persuaded that Joshi's departure should trigger a 10% haircut for 3D Systems, but that's the market reaction.