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DocuSign CEO Dan Springer Steps Down Following Firm Losing Over 60% of Its Value Year To Date (cnbc.com) 47

Posted by msmash from the tough-luck dept.
DocuSign CEO Dan Springer is stepping down, the company announced Tuesday. The decision comes after the e-signature software maker lost more than 60% of its value year to date. From a report: The company didn't provide a reason for his departure but said Springer "has agreed to step aside," effective immediately. Chairman of the Board Maggie Wilderotter will serve as interim CEO as the company begins its search for the next executive. Shares were up about 1% when markets opened. Springer took on the role of chief executive in 2017 and took the company public in 2018. DocuSign was able to capitalize on the Covid-19 pandemic as more consumers shifted to online transactions and deals. But its business has been slowing in recent quarters, especially as it faces tough comparisons to its dramatic growth in 2020 and early 2021. The deteriorating macro environment has also impacted the company. Shares were off 80% from their 52-week high as of Friday's close.
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DocuSign CEO Dan Springer Steps Down Following Firm Losing Over 60% of Its Value Year To Date More

DocuSign CEO Dan Springer Steps Down Following Firm Losing Over 60% of Its Value Year To Date

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  • Honestly kind of surprised (Score:3)

    by TomClancy_Jack ( 638962 ) on Tuesday June 21, 2022 @02:56PM (#62640134)
    I don't know if B2B is using it widely yet, but anecdotally in the last few real estate and even loan apps I've done it was the standard.

    • Re:Honestly kind of surprised (Score:5, Insightful)

      by Gilgaron ( 575091 ) on Tuesday June 21, 2022 @03:17PM (#62640180)
      It's pretty slick and is even compliant with some tricky e-signature requirements, it was probably just that it failed to grow logarithmically forever once everyone that needed it bought it.

      • Re:Honestly kind of surprised (Score:5, Insightful)

        by arglebargle_xiv ( 2212710 ) on Tuesday June 21, 2022 @03:53PM (#62640266)

        What this shows is the downside of a business-valuation model based on gambling, which is what most of the large US IT businesses are based on. The company is doing well, it has a solid business model, and its future is reasonably safe, but because that makes it difficult to bet on it gets dinged.

        In the meantime a startup selling fart-smell attachments for cellphones so you can prank your friends is valued by the stock market gamblers at a billion dollars.

        • In the meantime a startup selling fart-smell attachments for cellphones so you can prank your friends is valued by the stock market gamblers at a billion dollars.

          Is there an enterprise version? Asking for a friend.

        • It took me until this post that I realized I misread the company name as DoorDash instead of DocuSign. I thought at first maybe DoorDash had pivoted into some new markets that I hadn't heard about...it almost made sense in my head.

        • Re: (Score:2)

          by dbialac ( 320955 )
          I think it's more along the lines of people who are extroverted like to socialize, except when they can't like during COVID. As such, digital signing doesn't really offer much when you meet up to sign a contract. In the same business mindset, Doordash and Grubhup have seen their orders collapse because COVID is over and the few times I've used it since have been when I've been in the hospital and when they offered me a 75% discount. I mean who wouldn't take paying $10 for an order, substantial tip included?

      • Did it even fail to grow, or did the share market just tank for the entire industry regardless of growth and investors had a cry?

        • Interest rates rose to combat inflation, so the sharemarket fell which was entirely predictable, so yes its just investors having a whinge.
          The massively profitable corporation I work for (for example) has lost about 20% of it's value over the last few months but is still 10% above the 5 year share price, so what's the problem?

        • Re: (Score:2)

          by jrumney ( 197329 )

          My guess, without looking at the company financials, is that it is a bit of both. They benefitted so much from the COVID work environment, that they were always going to drop down from that high, plus the entire market is losing value. This will be a combination of general market sentiment and a correction of a temporary overvaluation thanks to the unsustainable growth due to COVID.

    • Re:Honestly kind of surprised (Score:5, Insightful)

      by Whateverthisis ( 7004192 ) on Tuesday June 21, 2022 @03:20PM (#62640186)
      It's super widely used in a lot of cases, but there are simple competitors out now. I get multiple different DocuSign style forms to sign things, Adobe has one for example and there are at least 2 others that I barely know the name of but receive regularly.

      I'm not surprised. The stock is back where it was pre-pandemic, around $60/share, but during the pandemic it was as high as $314. So technically shareholders have lost nothing compared to the original investment, but that's not how shareholders or Board members think. They think it dropped from $314 to $60 because that was the high.

      And to be fair, they're not wrong. DocuSign got a pandemic bump due to work-from-home. They did reasonably well, but at some point the pandemic would end and people would want to go into work, losing the driving force that kicked their stock up so high. A good CEO would realize this and leverage the big bump in stock to sell more shares and fund some strategic initiatives to ensure that DocuSign leveraged what the pandemic brought to them so they were ready for a post-pandemic world. They did not, and the stock went back to it's pre-pandemic levels; in essence he failed to capitalize on that bump and solidify their growth. This is also true of Peloton, Zoom, and many others. They all congratulated themselves for being the right solution when a disaster hit, but failed to realize that they didn't really do anything, just be in the right place at the right time, and not capitalize on that fortune to build more success. When the world went back to normal, their stocks corrected back to pre-pandemic.

      In DocuSign's case, the pandemic only proved the value of what they do and I've seen everything from startups to established companies like Adobe come out with competitive solutions. So not only did they fail to prepare for the post-pandemic, they were complacent by not aggressively defending their position and allowing others to step into their market. Boom. Done.

      • There's nothing they could have done to deal with the fundamental problem, though potentially they could have handled the short and medium term better, in that the value of digital signatures depends pretty substantially on their being legally relevant; and the legislation around digital signatures makes reference to various standards that more or less anyone can implement(and a number of vendors do; and the underlying cryptography isn't terribly novel for anyone doing digital signatures for other purposes
        • I agree they won't go out of business. Their business is healthy. But they grew and then dropped; he didn't capitalize on that and thus he's out as CEO.

          I do think they could have capitalized on that though. The CEO's job is to make money for their shareholders. So he should have either leveraged the much higher stock price to bring in extra liquidity and used that to go on a Marketing blitz and product development spree to continue to differentiate and stay ahead (their UI is honestly not my favorite

        • Heck, I can make "NIST compliant digital signatures" just out of my companies internal PKI CAs. My UX is beyond a nightmare (there is no UX, it's just using the built-in MMC certstore snapin requesting LOL), but I've got a template in the CA and can digitally sign stuff. Of course, my root CA isn't trusted outside my org, but the fundamental use is all there.
          • We actually had a slightly amusing outbreak of accidentally-sort-of-adequate signatures where I worked a few years ago. At least at that time, Skype for Business used certificates for something, I think something to do with its authentication processes; and while they were awful from the perspective of actual document signing(very short lifespans, didn't derive from a commonly trusted root) they were technically valid for that purpose and Acrobat picked up on their presence in a user's profile. We had to st

      • in essence he failed to capitalize on that bump and solidify their growth.

        No. He failed to solidify their fantasy share price. People didn't stop using DocuSign. It went from a basically unheard of tool to a completely standard form filling tool used by most mega corporations.

        The stock market fantasy that was going on sadly has zero to do with growth. Despite its rise it never had any business being a $300+ company in the first place, not unlike Peloton, Zoom or any of those others which were pumped up entirely by the homes and dreams of wallstreet.

        A sudden injection in cash in a

        • No, that's not true at all. They could have innovated; differentiate their product so it's more optimized for common use cases such as mortgages or homebuying. They could have worked on a digital verification tool that allowed notaries to use it so notarization could become remote rather than in person still. They could have opened up channels to be part of bank systems for documents, or ERP systems for sending purchase orders and sales orders. They could have become the go-to platform for any business

    • Re:Honestly kind of surprised (Score:5, Interesting)

      by ageoffri ( 723674 ) on Tuesday June 21, 2022 @03:23PM (#62640194)

      It's heavily used in B2B, nearly ever single MSA at the Fortune 200 I work at is finalized using DocuSign and we're talking hundreds if not thousands of signatures per year.

      The problem is that for the longest time, DocuSign was the only player in the market. I had a conversation a few years ago when I did a Cybersecurity 3rd party risk assessment on the Adobe product that DocuSign increases prices every single year.

      Between the poor customer service and constant price increases the competition doesn't have a high bar to hit to surpass DocuSign.

      Right now DocuSign is coasting on reputation but just as it was once said "No one ever got fired for buying IBM.", it's time is ending without major changes.

      • Yeah, they have the worst pricing in the market. Everyone else does the same job easier but at 1/7th the price.

        • Re: (Score:2)

          by jezwel ( 2451108 )
          Adobe Sign is included in our Acrobat licence, which is near on par to the cheapest DocuSign 'personal' plan. How do they expect to sell the higher priced plans? :o

    • Re: (Score:2)

      by jrumney ( 197329 )

      The "company value" is based on what the market thinks. At the start of COVID, growth will have outpaced expectations, so the value shot up, probably to more than the company was actually worth in the long run. As people go back to the office and usage drops, the market sees the drop in revenue and reacts accordingly (even though they should have known from the start that the COVID spike was going to be a temporary glitch). Combined with a general drop in the market, that is probably all you are seeing,

    • I believe that the negative experience of other companies is always a good opportunity for other companies to use this experience for their own benefit in order to improve their workflow. I have always had problems with communication, so now I am actively studying networking script [nection.io] in order to be able to conduct any dialogue and achieve my goals.

  • Trying to imagine how they assessed the value of the company to get the 60% drop in value. It's not like the bean counters could have made a mistake in the first place? Sort of like measuring jello with a hot glue gun and a large hammer?

    If they were looking at the customer side, then the new valuation certainly can't be based on any imminent or recent shortage of suckers.

    Oh, wait. It's a stock market story and the metric must be market cap. Mystery solved. If the stock market had perfect information about a

  • The company gained hundreds and then lost 60... That is a win in my book.

    • Re: (Score:2)

      by splutty ( 43475 )

      The title tries to suggest the 2 events might be related, but no one involved has said anything about it.

      So it might just as well have been "CEO steps down while bananas are yellow."

      • CEO steps down after whining whiners who don't understand the market sector continue to unload shares.
        CEO steps down after unrealistic investors realize they were being unrealistic.
        7 months after profit takers cause stock price to plummet 98 points in a day, CEO Says "Fuck This".
        Half a year after revealing positive earnings leading to historic 42% stock price loss in 1 day CEO is "So done with this bullshit".

        And So on, honestly I applaud the man for staying on after December last year. Really what they

        • Re: (Score:2)

          by splutty ( 43475 )

          I like yours better than mine. However I don't think number 2 would be true.. Ever.. :D

  • How can the scrawl I sent them possibly be confirmed as my signature ?

    Or in other words: Has anyone ever been convicted of forging a signature with Docusign ?

  • Interest Rates (Score:3)

    by bill_mcgonigle ( 4333 ) on Tuesday June 21, 2022 @03:37PM (#62640234) Homepage Journal

    Good luck finding a new guy! With interest rates headed for the Moon and the last guy getting shitcanned (from a deal-attestation service as the economy entered a recession, per Atlanta Fed) the Board is likely to savage the new guy too when economic reality accurately reflects in the income statement.

    Shareholders ought to think twice about that Board being able to attract talent. Stimmies and stonks shouldn't drive a Board.

    What happens if poor management drives the company into the ground? Who will authenticate those attestations for the next 30 years?

  • I sold my dad's house during COVID and everything went through Docusign. Sold a house earlier this year and everything was signed in person. Maybe Docusign was artificially inflated by all of that?

    • Maybe Docusign was artificially inflated by all of that?

      Or maybe your sample size of two ended up being one technically minded sale and one luddite. DocuSign is everywhere, even now that we're open. I have contractors walk to my desk** to tell me a DocuSign link is in my inbox. You have to be incredibly stupid to back away after adopting an efficient paper free process.

      **IN FUCKING GERMANY, Fatherland of the inefficient bullshit paperwork.

  • COVID bump (Score:3)

    by MDMurphy ( 208495 ) on Tuesday June 21, 2022 @04:17PM (#62640330)
    The stock price charts for Docusign and Zoom look very similar. They both got a boost in growth due to COVID lockdowns. Stock prices chased growth. No one would expect the early COVID growth rate to continue at the same trajectory, but when it didn't it's not surprising that the stock price declined.
    • Zooms whole "PKI infrastructure being in China", along with their various security issues, sure didn't help. They had to split off a "Zoom for Government" product that could prove DFARS compliance.

  • There's no mystery here! (Score:3)

    by Virtucon ( 127420 ) on Tuesday June 21, 2022 @08:13PM (#62640792)

    Cripes, anybody can do a quick bit of research and see that Docusign has a very negative PE ratio. It's way overvalued and has never turned a profit since going public. Right now investors are seeking value in their portfolios with the tightening market and Docusign while a good product isn't making bank despite good revenue numbers per their last quarterly/annual report. [docusign.com] They brought in $2.1B, an increase up 45% YoY and still:

    net loss per basic and diluted share was $0.36 on 197 million shares outstanding compared to $1.31 on 186 million shares outstanding in fiscal 2021.

    They're spending more than they're bringing in and also doing stock buy-backs to try and prop up the share prices. This is squarely on the shoulders of the CEO and the Board.

    Hopefully, the new CEO can clean up their balance sheet, or a bigger fish may likely come in and buy them since their valuation is tanking.

    • Well, following Harrison's Postulate, "For every action there is an equal and opposite criticism", maybe the real answer is that someone realised that Docusign is only the appearance of security and spread the word to other investors ?

      • Well they still have revenue coming in, their cost structure needs to be trimmed. I do think somebody like a Google, Microsoft or an Adobe would buy them and do the dirty work of cutting the fat.

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