Shutterstock hits all-time low on suspended dividend, accounting chief departure
Shutterstock has suspended its quarterly dividend and announced its chief accounting officer will resign / Photo: Facebook/Shutterstock
Shares of stock photography provider Shutterstock plunged 22% on Thursday to an all-time low. Its board suspended dividends as the company seeks to tackle its debt, while its chief accounting officer announced his resignation. Another major stock photography provider, Getty Images, had sought to acquire Shutterstock, but the deal fell apart.
Details
Shutterstock shares fell 21.95% on the New York Stock Exchange on Thursday to $5.76 apiece, their lowest level in the company's public history. The stock is now down 70% since the beginning of this year.
A day earlier, the stock photography provider announced that its board had decided to suspend dividend payments. Shutterstock stated that it was reviewing its capital-allocation priorities and planned to channel money toward reducing debt and strengthening its financial flexibility. In the first quarter of this year, it distributed $12.8 million to shareholders, or $0.36 per share. Its total liabilities, by comparison, stood at $629 million at the end of the period, virtually unchanged year over year.
Another negative factor was the announcement that Chief Accounting Officer Steven Ciardiello would resign effective August 28, StockStory, a fintech media project, reported. Shutterstock disclosed his departure the same day, Wednesday, in a regulatory filing. Although the company stated that there were no disagreements between the parties, the departure of a key executive, combined with the suspension of the dividend, weighed on investor confidence, writes StockStory.
About the business
Shutterstock has lost around 60% of its value month to date in July, its market capitalization at $211.6 million at the close of trading on Thursday.
The steepest decline came on July 1, when the stock tumbled 29% in a single session. The selloff followed Getty Images’ decision to abandon its planned merger with Shutterstock. Getty stated that the UK Competition and Markets Authority had required it to sell its editorial photography business as a condition for approving the deal.
Two weeks later, on July 13, Shutterstock announced the immediate departure of CEO Paul Hennessy. The company’s CFO, Rik Powell, was appointed interim CEO. The shares fell around 8% the following day.
Shutterstock is scheduled to report its financial results for the second quarter on August 6.
