Emcore Preps Solar Separation
Technically, the board has only authorized the creation of a plan for the split -- so it's unclear how soon any action might be taken.
At the same time, the company is shuffling the executive ranks, part of a succession plan announced in 2006. (See Emcore Elects Chair.)
The changes were all announced today after the market closed. Emcore shares were up $0.17 (2.5%) to $6.95 in early after-hours trading.
The split was anticipated by some analysts. John Harmon of Needham & Co. , in particular, has been mentioning the possibility in research notes of the past few weeks.
While optical components remain a tepid business, even after heating up during the past few years, solar is getting bubble-like attention from investors.
That's led to some debunking attempts. Citron Research recently carved into Emcore's solar business, pointing out the weaknesses in several of Emcore's announced customers. (See Sour Taste for Emcore.)
That helped Emcore's stock slide 60 percent in a recent two-week period, but Harmon says it's not cause for concern. "Emcore's technology is proven and has a clear roadmap, though the emerging nature of its customers makes it difficult to document their financial strength," Harmon wrote in his reaction to the Citron posting.
On the optical side, meanwhile, Emcore recently joined the big leagues, as Harmon put it, with the acquisition of Intel Corp. (Nasdaq: INTC)'s tunable laser business. (See Emcore Beefs Up.)
As for those executive changes, Reuben Richards, who's been Emcore's CEO, is moving to the new post of executive chairman. The CEO spot will now be occupied by Hong Hu, Emcore's president and chief operating officer.
Thomas Russell is stepping down as Emcore's chairman to become -- yeah, you guessed it -- chairman emeritus. And board member Thomas Werthan is stepping down for reasons yet unexplained.
— Craig Matsumoto, West Coast Editor, Light Reading