What Happened?
Shares of medical device company Globus Medical (NYSE: GMED) fell 6.6% in the afternoon session after the unexpected resignation of its President and CEO, Daniel Scavilla.
The medical device company announced that Scavilla resigned effective July 18 to pursue another opportunity. He will be replaced by Keith Pfeil, who was promoted from his role as Chief Operating Officer and Chief Financial Officer. While the company reaffirmed its full-year 2025 guidance for revenue and earnings per share, the sudden change in the corner office appears to have unsettled investors, leading to the stock's decline. The departure introduces a level of uncertainty, even with a well-regarded internal successor and positive sales momentum.
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What Is The Market Telling Us
Globus Medical’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 5.8% on the news that the major indices popped (Nasdaq +3.4%, S&P 500 +2.5%) in response to the positive outcome of U.S.-China trade negotiations, as both sides agreed to pause some tariffs for 90 days, signaling a potential turning point in ongoing tensions.
This rollback cut U.S. tariffs on Chinese goods to 30% and Chinese tariffs on U.S. imports to 10%, giving companies breathing room to reset inventories and supply chains. However, President Trump clarified that tariffs could go "substantially higher" if a full deal with China wasn't reached during the 90-day pause, but not all the way back to the previous levels. Still, the agreement cooled fears of a prolonged trade war, helped stabilize expectations for global growth and trade flows and fueled renewed optimism. The optimism appeared concentrated in key trade-sensitive sectors, particularly technology, retail, and industrials, as lower tariffs reduce cost pressures and restore cross-border demand.
Globus Medical is down 35.6% since the beginning of the year, and at $52.69 per share, it is trading 43.5% below its 52-week high of $93.32 from January 2025. Investors who bought $1,000 worth of Globus Medical’s shares 5 years ago would now be looking at an investment worth $1,102.
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