Intel stock fell continued falling this week prompting an industry analyst to accuse the chipmaker's board of badly mishandling the sudden exit of CEO Pat Gelsinger.
The shares had rallied early Monday when news of Gelsinger's departure was announced, signaling possible positive change at the struggling technology giant. But then the shares started falling. The stock tumbled for the fourth straight day on Thursday.
Industry analyst Patrick Moorhead, CEO of Moor Insights & Strategy, blasted the Intel board for the way they handled Gelsinger's departure.
Intel Stock: CEO's Sudden Exit
"I'm not an equities analyst, but I told you so," he said in a LinkedIn post. "This one was so easy to predict. Board ghosts the Intel Corporation CEO without an explanation or replacement and the stock plummets."
Gelsinger was reportedly forced out by the board which had lost confidence in his ability to turn things around at the struggling chip company, according to Bloomberg. Intel named two interim CEOs, David Zinsner, Intel's chief financial officer, and Michelle Johnston Holthaus, CEO of Intel Products. The company could not immediately be reached for comment for this story.
Intel stock slumped amid growing questions about what happens next, especially at a time when Intel is grappling with stiffer competition from rivals led by Nvidia and AMD.
Intel investors have been left in the dark, Moorhead argued.
"Investor's only thoughts are what bad happened?" he wrote. "Who can fill Pat's shoes? I talk to all of Intel's largest customer's executives. No one is cheering. The company needs to find a solid replacement, and fast."
In an email to Investor's Business Daily, Moohead also said, "Part of what a board does is makes sure they have is a succession plan. It's evident that there wasn't one in place. The board failed here."
Another veteran industry analyst, Tim Bajarin of Creative Strategies Inc, agreed.
The "board understands that stock is way down and questions future direction Pat was taking the company in," he told IBD. "I am not sure the board's intention was to just fire him but (they) did want Pat to change direction. It appears that Pat bucked the board's decision and decided to retire instead. "
"That is why there was no succession plan in place," he added. "I am sure there is much more to the story than what has been said so far but the challenges ahead for Intel are real and difficult."
Melius Research analyst Ben Reitzes said "the fact that CEO Pat Gelsinger was leaving Intel wasn't a surprise, but maybe the timing was."
"The announcement at first prompted some short covering likely on thoughts that this move could lead to a new plan that creates more shareholder value (cuts, asset sales, etc.), but we took the news as a modest negative," he said in a Monday note.
Intel stock shed 2.3% to close at 21.96 on Wednesday. The shares were last more than 5% in afternoon trades on Thursday. The shares have shed more than 13% this week, plunging well below the stock's 50-day moving average. Intel's Relative Strength rating dipped further to 12, down sharply from 96 a year ago, according to IBD MarketSurge.
