Shares of LegalZoom (LZ) plunged 30% to an all-time low Wednesday as the online legal services provider announced Chief Executive Officer (CEO) Dan Wernikoff was leaving and cut its full-year guidance.
The company reported that Wernikoff “will be departing,” and will be replaced by current board chair Jeffrey Stibel, effective immediately. Wernikoff’s had been CEO since October 2019, and took LegalZoom public in 2021.
The company explained that this was the “right time for this transition,” as shifts its focus “towards subscription-based revenue to drive long-term profitable growth.”
John Murphy, who was appointed Lead Independent Director, explained that the board identified Stibel “as the ideal CEO to lead LegalZoom’s next chapter.” Stibel has been on the board since 2014, and as an entrepreneur helped launch several tech companies. He was also co-founder, along with former NBA great Kobe Bryant, of the venture capital fund Bryant Stibel.
Along with the CEO change, LegalZoom said it was reducing its 2024 revenue outlook to $675 million to $685 million from the previous $700 million to $720 million. It also cut its free cash flow to a range of $75 million to $85 million, compared to its earlier estimate of $85 million to $95 million. The company didn’t give a reason for the changes.
LegalZoom shares plummeted more than 30% to $5.44 as of 10:12 a.m. ET Wednesday. They fell to an all-time low $5.33 soon after markets opened.
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