SPAC Earnings Fiasco Spurs CEO Shakeup at ATI Within Two Weeks
(Bloomberg) -- Two weeks after its dubious earnings debut as a public company following a merger with a blank-check firm, ATI Physical Therapy Inc. is replacing its chief executive officer.
ATI, which operates about 900 physical therapy clinics across 25 U.S. states, said in a statement Monday that Labeed Diab stepped down as CEO and board member, effective immediately. John Larsen, on the board since 2018, was named executive chairman and will help lead the company as it searches for its next chief executive.
ATI’s first public earnings report last month shocked analysts with larger-than-expected staff turnover and revenue projections that were revised sharply lower. Its shares plunged 54% over the span of two days, ranking it among the worst-performing firms to have gone public via a special purpose acquisition company, according to data compiled by Bloomberg. Law firms across the U.S. published press releases urging investors who had lost money to contact them for securities-fraud investigations.
“The Board has determined that it is the right time for a leadership change,” Larsen said in the statement, which added that the transition doesn’t affect the company’s 2021 earnings forecast announced last month. “We remain confident in the strength of the ATI brand, our market position and the long-term tailwinds driving demand for our services.”
ATI shares fell to as low as $2.81 on July 30. They were up 0.7% to $4.41 at 9:54 a.m. in New York. Most SPACs raise capital at $10, a price that’s often used as a benchmark.
Private equity firm Advent International owns about 62.9% of ATI. It agreed in February to take the Bolingbrook, Illinois-based rehabilitation services company public through a merger with Fortress Value Acquisition Corp. II, which closed in mid-June.
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