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Stock of the Day
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Symantec (SYMC)
Symantec CEO Steps Down
On Monday November 17, CEO John Thompson announced in a press release that he will be stepping down as the CEO of Symantec Corp. A successor has already been found and will be taking the reins as CEO on April 4 of 2009. Was this announcement a result of Thompson's guidance of Symantec? Also, will the new CEO have enough experience to take over this multi-billion dollar company, and what has been occurring in the world around Symantec as news of Thompson's resignation is released?
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Thompson was CEO for nearly a decade since 1999. Before becoming CEO, Symantec was generating revenues of a little over half a billion dollars annually. Despite stepping down, Thompson plans to remain with Symantec as a non-executive chairman of the board. Thompson also states that his plan to step down has not been a result of these tough economic times but that it has been planned for the last two years. During his tenure, Symantec has seen over 20 mergers and acquisitions. The notable acquisition of Veritas left the company stumbling a bit but Symantec has returned to positive growth. The news of Thompson stepping down comes just three days after Secure Computing Corp (SCUR: Charts, News, Offers) agreed to be acquired by Symantec competitor Mcafee (MFE: Charts, News, Offers). In similar news, Yahoo (YHOO: Charts, News, Offers) announced that CEO Jerry Yang will also step down as CEO but remain with the company board and stay on as "Chief Yahoo."
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Buy Symantec for just $4
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The successor to Thompson is the current COO, Enrique Salem. Salem was appointed to the COO post just last January. It was also said that despite the fact that Thompson has been working with the board to appoint a successor, no candidate from outside of the company was considered. Salem was working for Symantec from 1990 through 1999. He then left and began working for various companies in various high-powered positions like being the VP of technology and operations at Ask Jeeves. In 2004 however, Salem returned to the company when Symantec acquired the anti-spam company Brightmail where he served as the President and CEO.
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Investors did not respond negatively or positively to this news however, as Symantec shares opened low on Monday and climbed a bit before finally settling at $12.16. In after-market hours, there was little activity as the stock prices stayed the same. This morning however, Symantec opened about 1.5 percent higher at $12.35 as opposed to when it closed at $12.16. Analysts also maintained their "buy" rating and "market perform" rating on Symantec. Since Thompson stepped up to become CEO, Symantec has been able to grow the company to generate multi-billion dollars. In the latest earnings report, Symantec generated $140 million on revenues of $1.5 billion compared to the same period last year with $50 million in net income on revenues of $1.4 billion.
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With Thompson to guide Salem for a few more months, things could turn out okay. Even if the economy does not turn out better, some analysts say that because of the nature of the technology sector's need for funding and resources, it is a safe place to invest during these economic times. This may or may not be true, but Hewlett-Packard (HPQ: Charts, News, Offers) revised their earnings outlook to be slightly better than Wall Street estimates while other technology bellwethers like Intel (INTC: Charts, News, Offers) had cut their outlooks for the upcoming quarter. If Salem can demonstrate his leadership in these times of difficulty drawing from his experience, Symantec may have a winner on their hands and continue to generate positive results for their investors as they have in the past. And while a smooth transition is expected, a change in hands can still create some unforeseen bumps along the way.
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