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Sometimes major changes happen right out of the blue. On Thursday February 17, 2001, Compass Diversified Holdings (NYSE:CODI) announced in a brief press release that its CEO, Joe Massoud, would be taking an immediate leave of absence from the firm to

focus his attention on an informal regulatory inquiry… on matters unrelated to the [company].

A new temporary CEO has been named to run the mini-conglomerate, whose financial performance in recent quarters has been stellar. Why Mr Massoud needs to focus elsewhere (he also gave up his Board seat) is not mentioned, and the BDC Reporter does not have any further light to shed on the why and hows. We may learn more at the company’s next earnings conference call on March 10th, 2011.

IMPACT ON STOCK PRICE

The news has hit the stock hard, with the price down 7% on Friday, down to $16.7, or just under $2 under its 52 week high. On the day the stock traded 8x its normal volume. The company pays a $1.36 annual dividend, which shouldn’t be affected by the CEO’s leave of absence in the short run.

However, selling shareholders must be guessing Massoud's departure could materially affect the company's long term prospects. This is a story with legs as they say in the news business.

Source: Compass Diversified: Stock Drops on CEO's Leave of Absence