What: Shares of CaesarStone Sdot-Yam Ltd (NASDAQ:CSTE) dropped as much as 23% today after a shakeup of the company's board.

So what: Last week, Caesarstone board member Ram Belinkov resigned from his post, leaving the company with five independent board members on a 10-person board. This was in violation of NASDAQ Stock Market rules that require a majority of independent members. The company alerted Nasdaq and on Thursday it got notice that it was in violation of NASDAQ Listing Rule 5605(b)(1)(A), but would get some time to come back in compliance.  

Friday, it was announced that another board member, Avner Naveh, had resigned from the Board of Directors, leaving five independent board members on a nine-person board. The company was back in compliance with the rules.  

This morning the company released a statement that the resignation of the two board members wasn't due to unusual tension and the Board of Directors is standing firmly behind management.

Now what: It's not unusual for board members to come and go, but it's unusual to have two resign so quickly and to just change the size of the board overnight. So far, we haven't gotten any indication that operations are suffering, but the shakeup will put increased scrutiny on the next quarter's results. I wouldn't be a panic seller today, but this stock is worth keeping a close eye on for signs that the last week's releases haven't been the whole story.

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