Masimo CEO steps down, but not because of Apple Watch dispute
Former Masimo CEO Joe Kiani may have won the war against Apple, but he has resigned after losing a fight with a hedge fund.
Apple Watch Series 9 and newer are sold with a deactivated blood oxygen sensor
After spending over $100 million and betting the company he founded on principle alone, Joe Kiani is out at Masimo. However, the reason he has resigned as CEO has nothing to do with Apple or a patent dispute.
Reuters has the story, stating that Kiani stepped down after being removed from Masimo's board by shareholders. The move came after a proxy battle with hedge fund Politan Capital Management.
The battle ensued after a $1 billion acquisition of Sound United, which turned Politan to push Kiani out. Politan nominated key board members, one of whom is now interim CEO, Michelle Brennan.
Politan has a 9% stake in Masimo. Kiani had previously said he'd quit as CEO and sell his shares if investors replaced him with a Politan nominee.
About the Apple Watch
On the surface, none of this has anything to do with Apple, kind of. Kiani had what seemed like a personal vendetta with Apple and was happy to battle the company tooth and nail over the Apple Watch blood oxygen sensor patent.
The Apple Watch was temporarily banned from sale until Apple turned off the sensor via software. Appeals are underway, and now with Kiani gone, there's a much better chance of Apple paying a settlement.
Previously, Kiani said he'd happily accept a settlement if Apple bothered to make a call. So it isn't clear if removing Kiani from the equation will change anything, as Apple could double down and push for dismissal.
Read on AppleInsider
Comments
Masimo won a key battle, but has not won the war. Not when Apple still has a lot of leverage and can wait out the remaining patent claims it didn't get invalidated.
BUT.... this was nothing compared to Kiani biggest blunder, which was spendiing $1 billion to acquire several consumer audio companies under their corporate umbrella name, Sound United. THAT'S what really got him pushed out. Now if you're wondering why the hell a medical equipment company like Masimo would spend a billion to get into consumer audio, you have the same question that drove the Politan hedge fund, which owns 9% of Masimo, to launch a board fight to get Kiani pushed out. Apparently Kiani thought consumer audio was the way to open up retail channels like Best Buy to Masimo. Never made sense to me and I guess not to the Masimo board either.
Reading up on Politan's complaints about Kiani, man, Tim Cook has some good spidey sense on people's character if half the things Politan says about Kiani are true. Politan says Ceracor is basically a front company for Masimo to send millions to Kiani, of which he is the CEO of both. Then, Kiani's separation plans from Masimo? Free license to all of Masimo's patents, Kiani's choice of employees, $400m? Basically Ceracor 2.0. Who would agree to that? Just lots of shenanigans.
Regarding Sound United, I was suspicious that Kiani was going to use those patents to sue Apple. Bowers & Wilkins, Denon, Polk. Some great audio brands of the past that is under the Sound United umbrella. Imo, definitely on the table if Kiani is still CEO. Now? Who knows. Apple has to do the work to invalidate all the patents Masimo used against them.
None of the outstanding issues have been decided by a court, including a counter claim against Masimo by Apple