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Riverstone Founders Resign

Question: The company you've founded is suffering from falling revenues, is besieged with scandal, is losing market share, and is badly in need of a makeover. What do you do?

Answer: Spend more time with your family, of course!

That's what Riverstone Networks Inc. founder Piyush Patel announced he would do as he resigned from Riverstone's board of directors this week (see Riverstone Founders Leave Board).

Riverstone founder Romulus Pereira also resigned from the company's board, the company announced Monday, leaving the board without a chairman. Pereira had also served as the company's president and CEO until Oscar Rodriguez's appointment in August.

Whatever the reasons publicly given, it's abundantly clear that Rodriguez and the new Riverstone management team want to put a new stamp on the company, and the departure of Patel and Pereira completes a clean sweep of Riverstone's leadership. Rather than fill the chairman of the board post, the company has appointed an independent director as a "Lead Director" to keep an eye on the board.

The turnover is not surprising, as Riverstone has had its share of bumps this year:

But that's all in the past, and, though Rodriguez and his new team have been quiet so far, observers are confident that they're capable of cleaning up the mess left by Pereira, Patel, and the ancien régime.

Table 2: Riverstone Management Team, as of 5/2002
Name Title
Romulus Pereira President and CEO
Robert Stanton Executive VP and CFO
John Kern Executive VP, Worldwide Sales and Service
Suresh Gopalakrishnan Executive VP of Engineering
Andrew Feldman VP of Corporate Marketing and Development
Source: SEC filings


Table 3: Riverstone Management Team, as of 12/2003
Name Title
Oscar Rodriguez President and CEO
Roger Barnes Executive VP and CFO
Scott McMillan VP of Operations
Praveen K. Mandal VP of Engineering
David Ginsburg VP of Marketing
Source: Company data


Several nagging questions remain. First of all, is all this cleanup happening too late? "How far have Extreme Networks, Foundry Networks, and Cisco Systems gotten during Riverstone's time of disruption?" asks Chet White, an analyst with Merriman Curhan Ford & Co.

The company does have something to build from, though. As noted in a recent survey of carrier employees and executives conducted by Heavy Reading, Riverstone gets high marks from incumbent service providers as a metro Ethernet supplier.

Table 1: Metro Ethernet Equip. Ratings by 69 Incumbent Carrier Respondents
RANK VENDOR RECOGNITION PRICE PERFORMANCE QUALITY & RELIABILITY SERVICE & SUPPORT
1 Riverstone 36.2% 16.2% 16.3% 17.5% 9.3%
2 Extreme 46.4% 8.1% 4.7% 2.5% 2.3%
3 Foundry 43.5% 0.0% 0.0% 0.0% 0.0%
Source: Heavy Reading


Riverstone declined to comment for this piece, citing its end-of-quarter quiet period.

— Phil Harvey, Senior Editor, Light Reading

dmfr14000 12/4/2012 | 11:10:36 PM
re: Riverstone Founders Resign No one will be able to match the mess which these crooks (Patel, Pereira) have made of the company, which I am told was once known for its engineering talent. The company is not likely to recover from the downward spiral of the SEC investigation and delisting from NASDAQ. There goes the money which I invested in Riverstone Networks. Good riddance to these two crooks!
change_is_good 12/4/2012 | 11:10:35 PM
re: Riverstone Founders Resign >>> There goes the money which I invested in Riverstone Networks.

what the hell were you thinking when you invested in riverstone?

technonerd 12/4/2012 | 11:10:31 PM
re: Riverstone Founders Resign There goes the money which I invested in Riverstone Networks
Excuse me, but did you "invest in Riverstone Networks" or did you speculate on the price of the company's shares? There is a significant difference.
fw23 12/4/2012 | 11:10:29 PM
re: Riverstone Founders Resign >There goes the money which I invested in >Riverstone Networks
>Excuse me, but did you "invest in Riverstone >Networks" or did you speculate on the price of >the company's shares? There is a significant >difference.

Many people did invest in riverstone based on
the financials the company was reporting. Its
difficult to just write them off as speculators
who got what they deserved because the price
is a reflection of systematic fraud rather
than a change in the market or the business
climate.

I think riverstone should uptick its marketing
profile. I would suggest sponsoring a formula
one car. Their problems are less well known
in europe and F1 racing is an easy way to
build name recognition.

jbrissett 12/4/2012 | 11:10:18 PM
re: Riverstone Founders Resign Does any one know how the XGS product family is doing ?

http://www.lightreading.com/do...
http://www.lightreading.com/do...
http://www.lightreading.com/do...

There are no deployment news about XGS in the trade-rags.
There are no press releases from Riverstone about the deployment of XGS either.
Like the revenues, was the XGS product simply "smoke and mirror" or was it a big flop ?.
dcarleton2000 12/4/2012 | 11:10:04 PM
re: Riverstone Founders Resign >
> Like the revenues, was the XGS product
> simply "smoke and mirror" or was it a big
> flop ?.

May be the acquisition of the company which made
XGS was a failure.

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