Masimo CEO steps down, but not due to 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.

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.

11 Comments

anonymouse 6976 comments · 15 Years

About 2 months ago

Are we really certain that Apple didn't covertly engineer this coup?

danox 3442 comments · 11 Years

anonymouse said:

Are we really certain that Apple didn't covertly engineer this coup?

Equity funds are sellouts at their core and think short term Apple doesn’t have to do a thing just sit back and relax,….

melgross 33622 comments · 20 Years

anonymouse said:

Are we really certain that Apple didn't covertly engineer this coup?

Yeah. He was under a lot of pressure. It had nothing to do g to do with Apple.

ronn 688 comments · 20 Years

"Former Masimo CEO Joe Kiani may have won the war against Apple, but he has resigned after losing a fight with a hedge fund."

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.

charlesn 1193 comments · 11 Years

melgross said:

anonymouse said:

Are we really certain that Apple didn't covertly engineer this coup?

Yeah. He was under a lot of pressure. It had nothing to do g to do with Apple.

I've been following the Kiani story for a while and his ouster was a long time coming. First, he spent over $100 million of Masimo money fighting Apple in court, an absolute fortune for which he has little to show: for Watches sold in the US since approx January, Apple has had to put a software lockout on the pulse oximetry feature. Masimo got nothing else for its $100 million spend, while the loss of pulse oximetry has likely had little if any effect on Apple Watch sales. Plus, Masimo's remaining patents expire in 2028 if they don't get invalidated before hand.

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.