Online video provider Netflix Inc (NASDAQ:NFLX) said on Tuesday its long-time chief financial officer Barry McCarthy has resigned and will be succeeded by company finance veteran David Wells, sending its shares down in after-hours trading.
A Netflix spokesman said McCarthy first expressed his intention to resign in 2004, but decided to remain as the company built itself into a DVD rental and streaming powerhouse.
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As of November 30, McCarthy's Netflix holdings, according to Securities and Exchange Commission filings, totaled 51.6 million shares, or 0.1 percent of the company, worth about $97.9 million based on Tuesday's closing price.
"He always had aspirations beyond Netflix," said company spokesman Steve Swasey, declining to elaborate.
The company's stock fell 3.6 percent in after-hours trading to $182.99 a share following the company's announcement. The stock closed down $3.66 a share, or 1.89 percent, at $189.81 a share on Nasdaq.
"He's a super capable CFO, although he was sometimes gruff and was not very tolerant of people who didn't do their homework," said Michael Pachter, an analyst with Wedbush Morgan, who has a sell rating on the company on views Netflix is overvalued.
Analysts noted that a change in a CFO often sends jitters through Wall Street, particularly in the case of success story like Netflix. The company has seen meteoric growth with its mail-order DVD rental service and quickly expanding streaming service at a time of weak DVD sales and mounting concerns about cord cutting, which is when consumers replace cable subscriptions with Web video.
Analysts also said they expected McCarthy was likely being courted by other companies following his successful run as CFO at Netflix.
Wells has served at the company for nearly seven years and combines both senior analytical and operating experience. He most recently served as vice president of financial planning and analysis, reporting to McCarthy.
McCarthy has served as CFO of Netflix since 1999 and led the company's initial public offering in 2002.
Prior to joining Netflix in 2004, Wells spent six years in increasingly senior roles at Deloitte Consulting, where he managed consulting engagements in the retail and consumer products industries.