What happened
Wall Street hates surprises. Sure enough, the unexpected departure of Logitech International's (LOGI 0.69%) CEO has investors racing for the exits, sending shares down more than 12% on Wednesday morning.
So what
On Wednesday, Logitech, maker of keyboards and other computer peripherals, announced CEO Bracken Darrell is departing in order to "pursue another opportunity." Darrell's resignation is effective immediately, though the company said he will remain for a few months in order to help facilitate a seamless transition.
Director Guy Gecht will step in as interim CEO while a permanent replacement is found.
"As an experienced CEO, and member of Logitech's board since 2019, Guy has a deep understanding of Logitech and its strategy, and is well-placed as interim CEO to oversee the continued execution of the company's strategy," board chair Wendy Becker said in a statement. "We thank Bracken for his leadership during an exciting era of transformation at Logitech."
Darrell was CEO for a decade and is credited with helping to make Logitech a standout in what was a highly commoditized market. The outgoing CEO said in a statement, "I feel this is a good point to hand over leadership," though he said he will remain a customer and shareholder of Logitech.
Now what
There is no hint of foul play or scandal here. But Darrell was highly regarded as CEO, and the transition threatens to slow or derail Logitech's growth strategy from here. Citi downgraded the stock to neutral from buy following the announcement, with analyst Asiya Merchant moving to the sidelines until the dust settles and Logitech's new leadership can provide thoughts on long-term growth targets.
Shares of Logitech are up more than 700% over the past decade, even with Wednesday's drop. The underlying business should be able to survive through this transition, but given the number of unknowns at this moment, investors don't seem to have a lot of appetite to rush in.
