The chief executive and the president of troubled Marvell Technology have stepped down from those positions, effective immediately. The company is conducting a search for replacements.
The husband and wife team of CEO Sehat Sutardja and President Weili Dai will remain on the board, however, with Sutardja continuing as chairman. Both were founders of the company, established in 1995.
There was no mention of Starboard Value, a fund that has taken a 6.7% minority share in Marvell Technology Group Ltd. (Nasdaq: MRVL), but sidelining management is straight out of the dissident investor's handbook. Marvell's stock shot up over 10% on the news.
Little has gone right recently at Marvell. Its fortunes were already flagging due to drooping sales of hard drives and mobile phones (the company's chips are used in both) when it announced an accounting irregularity more than a year ago.
It's been several quarters since Marvell last published an earnings report. After conducting an audit that dragged on for months and months, Marvell in February hired Deloitte & Touche to sort through the mess. The accounting firm delivered its report on March 1, and Marvell said it has been working since then to complete its Annual Report for fiscal 2016 and its quarterly reports for the second and third quarters of fiscal 2016.
Nasdaq has been threatening to de-list the company, but Marvell promises it will publish its 10-K and 10-Qs "as soon as practicable," and has asked the board to let its stock continue trading. The exchange will hold a hearing with the company on April 14 to decide.
During all of that, the company was finally compelled to fork over $750 million to Carnegie-Melon University to settle a patent infringement suit it had lost. (See Marvell Pays CMU $750M to End Feud .)
Meanwhile, the company is considered undervalued and remains an object of speculation about being taken over. Other than issuing a statement flatly denying that Broadcom is interested in buying the company, Marvell has been silent on the issue.
While the company searches for new management, the Marvell board has formed a new interim office of the chief executive consisting several of the company's line executives.
Maya Strelar-Migotti, Marvell's executive vice president of Smart Networked Devices and Solutions (SNDS) Business Group, and Pantelis Alexopoulos, executive vice president of the company's Storage Business Group, will lead the "interim office."
The other members of the interim office of the chief executive include CTO Zining Wu; interim chief financial officer David Eichler; senior vice president and general counsel Tom Savage; and William Valle, the company's vice president of global human resources.
— Brian Santo, Senior Editor, Components, T&M, Light Reading