New Focus Gets New CEO
Chairman of the board R. Clark Harris has been named the new president and CEO. Harris has been a director of New Focus since December 1998. He was named chairman of the board in August after founder Milton Chang resigned from that position. Harris is also a partner at NorthEast Ventures, a firm that provides strategic consulting and advisory services to high technology companies. Prior to joining NorthEast Ventures, he served as president of a major division of Uniphase, now JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU), for three years.
The official line from the company is that Westrick left for “personal reasons” and that he wanted to spend more time with his family. But the word on Wall Street is that the board of directors wanted Westrick out. While the company’s revenues grew significantly year over year in the second quarter, losses and expensive acquisitions kept the company in the red (see New Focus Sees New Losses).
“I think what happened is that the market tanked and he got pinched,” says one analyst who didn’t want his name used. “There’s a lot of speculation going around that the board had serious questions about whether he was the right man for the job.”
Some also wonder if the departure of Chang also played a role in Westrick’s departure (see Chang Changes Hats). Westrick was Chang's hire; Chang brought him into the company before it went public, and Westrick helped lead New Focus to a successful IPO in May 2000 and through a secondary offering in August 2000 that raised nearly $550 million.
New Focus and its competitors, JDS Uniphase and Corning Inc. (NYSE: GLW), were all trading down today. New Focus closed down 0.29 (7.53%) to 3.56; and Corning was down 0.41 (4.56%) to 8.59. But analysts say they don’t think that the announcement is the cause for the weakness today.
”I doubt that the weakness in the sector is based on the press release,” says Tony Carbone, an analyst with J.P. Morgan & Co. “He supposedly left for personal reasons, but it’s hard to tell what that means. It’s different than if he went to another company.”
The company will announce its third-quarter results on October 24, 2001.
— Marguerite Reardon, Senior Editor, Light Reading