Carl Icahn may be about to work his magic on another company. This week, reports surfaced that Illumina (NASDAQ:ILMN) is gearing up for a change in leadership. More specifically, CEO Francis deSouza just announced his resignation after a proxy battle with Icahn that first began back in March.
As InvestorPlace contributor William White reports, Icahn sought changes at the company after voicing concerns regarding some acquisitions he saw as poor investments. Now, it appears that the activist investor is about to get his way as Ilumina’s most powerful executive steps down.
Today, ILMN stock is rising on the news, indicating that the market is responding well to Icahn’s success.
What’s Happening With ILMN Stock?
After a difficult year, ILMN stock finally seems to be turning around. As of this writing, shares are up more than 3%, although the stock’s trajectory has been volatile. That said, the market seems to be overall happy that Icahan is getting his way.
Given how shares have performed this year, it’s not hard to see why. ILMN is only down about 1% for the past six months, but to describe its performance as volatile would be an understatement.
While Ilumina’s board looks for a new CEO, general counsel Charles Dadswell will hold the position on an interim basis. The Wall Street Journal reports:
“The departing CEO, who will remain an adviser until July 31, had been with Illumina since 2013 and served as chief executive since 2016. His exit, after other recent changes to Illumina’s board, is likely to hasten a resolution of the company’s battle with U.S. and European antitrust regulators over the purchase of cancer-test developer Grail.”
It’s true that the proxy battle that stemmed from this company’s Grail acquisition has weighed heavily on ILMN stock for months. Icahan has been a strong critic of the deal, calling it a “reckless decision.” The fact that he has successfully ousted the CEO behind the move certainly bodes well for Illumina’s prospects. That’s likely part of the reason shares are rising today. For the first time in months, investors are seeing the possibility for a turnaround.
Additionally, Illumina now has the option to divest its ownership of Grail, a course of action that current leadership may pursue aggressively. If management does so, ILMN stock could benefit significantly. All told, Illumina looks like a strong candidate for an Icahn bump, regardless of how involved the famed investor is moving forward.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
