VMWare Inc. (VMW) – Get Report shares slumped lower in early trading Wednesday after its CEO was tapped to replace the outgoing Bob Swan at Intel Corp. (INTC) – Get Report.
Pat Gelsinger will replace Swan, who is setting down after two and a half years at the helm of the struggling chipmaker. He will, however, remain on the board of VMWare, with CFO Zane Rowe acting as interim CEO. Intel called Gelsinger a “roven technology leader with a distinguished track record of innovation, talent development, and a deep knowledge of Intel.” VMWare said.
Gelsinger’s departure could complicate Dell Technologies Inc.’s DELL plans to spin-off VMWare, in which it holds an 81% controlling stake, before a September 21 deadline that would eliminate the tax-free status of such a transaction.
“I speak for the VMware Board of Directors, executive management and employees in expressing our gratitude to Pat for his leadership at VMware, and we are thrilled to keep him on as a member of the Board,” commented Michael Dell, VMware Chairman of the Board.
“As CEO for the past eight years, Pat led the company’s tremendous growth and expansion and built a solid foundation for future innovation. Zane has been a key strategic partner to Pat during this time of growth. His deep knowledge of the company and strong relationships will lead the team well through the transition period.”
WMWare shares were marked 5% lower in early trading Wednesday to change hands at $135.80 each. Dell shares were marked 4.6% lower at $73.22 each.
Intel shares, meanwhile, surged 8.9% to a July 2020 high of $58.00 each.
“It has been the honor of my lifetime to serve as the CEO of VMware. We have transformed the global technology landscape for the better, and I am confident that the company will continue to excel as they enable customers with the digital foundation for an unpredictable world,” Gelsinger said. “My sincere and heartfelt thanks to Team VMware, our customers, and our partners for some of the most rewarding years of my career.”