Masimo Gains as Activist Politan Secures Two Board Seats

Shares of Masimo are showing an increase of nearly 3% early on Friday after activist investor Politan Capital Management, who holds a 9% stake in the company, announced that their two independent board nominees—Darlene Solomon and William Jellison—were successfully elected to Masimo’s board during the 2024 Annual Meeting of Stockholders.

The newly elected directors, along with Politan’s Chief Investment Officer Quentin Koffey, released a joint statement highlighting their enthusiasm for Masimo’s future as a leading innovation-driven growth company.

They stated, “We look forward to meeting with, learning from, and working together with the Healthcare and Consumer employees. We also want customers to know that we will be fully focused on preventing any disruption to their service and support,” and added, “We will have more to share soon.”

Commenting on the development, analysts at Piper Sandler noted that the results of the meeting were not unexpected and encouraged caution among investors. They indicated that the focus would now shift to the status of senior management, including possible changes, and insights on third-quarter results, with preliminary announcements expected in early October.

Additionally, Piper Sandler highlighted potential key areas for the stock, such as the board’s strategy regarding a separation of the Consumer division and the ongoing litigation with Apple.

Analysts at Stifel concurred, suggesting that with the clarity gained from the key shareholder vote, attention will likely turn towards post-AGM leadership at Masimo and the strategic direction of the Healthcare business, along with the possibility of separating the Consumer segment.

They also noted that this vote resolves significant uncertainty regarding Masimo’s board composition and sets the stage for determining the long-term leadership trajectory of the company.

While both firms acknowledged the importance of this shareholder vote for Politan, they also expressed that the true impact on the company’s direction and benefits for long-term investors remain to be seen.

Stifel and Piper Sandler maintained their “Buy” and “Overweight” ratings, respectively, assigning price targets of $170 and $165. Following the announcement, shares of Masimo are trading around $115 and have remained relatively flat year-to-date.