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What: Shares of health information services provider WebMD
So what: Today was actually a double whammy. First, it was announced that WebMD CEO Wayne Gattinella had resigned and that he'd be replaced in the interim by the company's CFO. Secondly, and most importantly, after failing to find what the company deemed an adequate bidder, WebMD took down the "for sale" sign in its front yard. WebMD will remain an independent company, but warned that slower ad spending from drugmakers and increased competition could cause near-term shortfalls in sales and earnings.
Now what: Today's move lower might seem like an overreaction at first, but it could be just the beginning. Slated to grow sales at just 1% in 2012, WebMD's profit forecast has fallen by more than a quarter in the past three months, according to estimates on Yahoo! Finance. That places WebMD at a not-so-thrifty 29 times forward earnings, which is clearly more than I'd feel comfortable paying with the company's future so uncertain.
Craving more input? Start by adding WebMD to your free and personalized watchlist so you can keep track of the latest news with the company.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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