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Disney Stock Sinks With CEO Succession in Shambles

The surprise resignation of Thomas Staggs, the heir apparent to CEO Bob Iger, pulls shares lower

Disney shares slipped Tuesday as investors coped with newfound uncertainty about the entertainment giant’s leadership, after the unexpected resignation on Monday of the company’s No. 2 executive and heir apparent to CEO Bob Iger.

Shares were down 2.3 percent at $96.40 midday Tuesday, the first trading day after Disney said Thomas Staggs would depart next month after 14 months as COO and likely successor to Iger, whose contract runs through June 2018.

The stock has slipped more than 8 percent in the last year, underperforming the market at large.

After the close of trade Monday, Disney said Staggs would stay on as an advisor through the end of the fiscal year after exiting his current position on May 6.

Staggs, a 26-year vet of Disney, beat the company’s financial chief Jay Rasulo for the COO spot and the company was clearly grooming him to become CEO when Iger retires in June 2018.

The company didn’t provide a reason for the exit. The board issued a statement that they planned to “broaden the scope of its succession planning process to identify and evaluate a robust slate of candidates for consideration.”

But as a company that traditional promotes from within, Disney faces newfound uncertainty about its future leaders. With Rasulo having already left the company, Staggs departure creates a vacuum of internal talent to feed the top executive spot.

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