Intel Rallies After Snagging VMware CEO

  • Stock Market News
Intel Rallies After Snagging VMware CEO

By Christiana Sciaudone -- Intel (NASDAQ: INTC ) named VMware (NYSE: VMW )'s chief as its new chief executive officer, prompting shares to rise 8%. VMware, on the other hand, dropped 7%. 

Pat Gelsinger, who has led VMware since 2012 and overseen a tripling in revenue, will replace Bob Swan next month. Swan has been Intel's CEO for two years, after serving as interim head for six months, Bloomberg reported.  

Activist investor Dan Loeb has been pushing the chipmaker to seek strategic alternatives for the company, including a possible breakup and sale of assets. Delays in the chip fabrication process have plagued Intel, and it is in talks with Taiwan Semiconductor Manufacturing (NYSE: TSM ) and Samsung (KS: 005930 ) Electronics (OTC: SSNLF ) to make some of its chips, Bloomberg said.

Intel also said it expects to exceed previous guidance for fourth quarter sales and profit. In October, the company reported guidance for the fourth quarter, with sales at $17.4 billion and earnings per share of $1.10.

Gelsinger has been in the industry for more than 40 years, and this won't be his first time at Intel. He spent 30 years at the company, and was its first chief technology officer. He drove the creation of key industry technologies such as USB and Wi-Fi. 

VMware has initiated a search for a new CEO. Zane Rowe, VMware’s chief financial officer, has been appointed Interim CEO. Gelsinger will continue to serve on the VMware Board of Directors.

Shares of VMware are up some 70% since Gelsinger took over in 2012. In the meantime, while Intel shares have tripled in that time, they are still below a dot-com era peak in 2000.


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