Friday, March 29, 2024

Symantec’s Stock Tumbles – Trust Falls as CEO Exits

Symantec CEO, Greg Clark’s exit has dented the company’s image in the market very badly.

The company now faces a tough task to turn around and repair its market reputation and win investor confidence again. Interestingly, Chief Executive Officer Greg Clark became the fifth top executive in six months to leave the cybersecurity company. The reason he cited was that he wanted to take care of his ailing father.

The exit came as a shock, driving a 15 percent slump in the company’s shares and erasing more than $2 billion in market cap. A gloomy set of quarterly results that fell short of expectations on revenue triggered a warning on profit as well.

“Investors were desperately hoping to see some stabilization for the current quarter, but what they got instead was a number of negative surprises in the form the company’s CEO heading out and its struggles to grow sales,” Investing.com analyst Haris Anwar said in reportage to Reuters. “These developments signal Symantec has both internal and external challenges to overcome … let alone grow its market share.”

Also Read: Managing Cloud Computing Cost: Challenges & Strategies

In the meantime, Richard Hill, who joined the company’s board as a nominee of hedge fund Starboard, will become interim CEO. In August 2918, Starboard had disclosed a 5.8% stake in the company. They have reportedly demanded the appointment of three directors to its board. Hill has been a board member of several companies as a Starboard nominee. At the conference call with analysts, he was quite vocal, maintaining he was the ideal candidate for the job. “If I feel disappointment in the numbers and I think it is bad, I will tell you that and what we are going to do to fix it,” he said, reports Reuters.

Earlier this year in January, Nicholas Noviello the CFO had quit and he has been replaced by Vincent Pilette, formerly with Logitech International, as its new chief financial officer. Analysts at global firms, who are closely following these movements, were of the opinion that the new executives had limited software industry experience. With them at the helm, there could be broader company disruption.

Since the end of 2018, Symantec saw a series of key executive departures- that includes Chief Operating Officer Michael Fey and Chief Marketing Officer Michael Williams.

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