What Happened?
Shares of life sciences company Neogen (NASDAQ: NEOG) fell 7.2% in the morning session after the company announced the planned departure of its Chief Financial Officer and Chief Operating Officer, David Naemura.
The food safety solutions provider stated that Naemura will remain in his roles until after the company files its 10-Q report in October, with his departure expected no later than the end of 2025. Neogen has initiated a search for a successor. The leadership change introduces uncertainty for a company whose stock fell sharply over the past year.
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What Is The Market Telling Us
Neogen’s shares are extremely volatile and have had 37 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 27 days ago when the stock dropped 3.7% as the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners.
A key reason for this trend is that much of the recent market gains were concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors were locking in some gains ahead of more definitive feedback from the Fed.
Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap."
Additionally, mixed earnings reports from retailers, such as Target, added to the market's weakness. Investors have been closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.
Neogen is down 57.1% since the beginning of the year, and at $5.12 per share, it is trading 70.8% below its 52-week high of $17.53 from September 2024. Investors who bought $1,000 worth of Neogen’s shares 5 years ago would now be looking at an investment worth $134.62.
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