MW This CEO caused a nearly $3.6 billion swing in market cap between chip rivals
By Tomi Kilgore
Lattice Semiconductor's stock tumbled after CEO Jim Anderson left to join Coherent, which saw its stock soar
Shares of Lattice Semiconductor Corp. tumbled Monday, after the semiconductor company's chief executive left to join chip-sector rival Coherent Corp. - which, in turn, saw its stock soar to its best day in four years.
Lattice $(LSCC)$ said early Monday that Jim Anderson had stepped down as CEO effective immediately, after about six years in the role, to "pursue an opportunity with another company." Lattice said it had named Esam Elashmawi, its chief marketing and strategy officer, as interim CEO while it searches for a permanent replacement.
Minutes later, chip and optical-components maker Coherent $(COHR)$ announced that it had appointed Anderson as its CEO, nearly four months after the company announced that former CEO Vincent Mattera was retiring.
The news sent Lattice's stock tumbling 15.5% on Monday, its biggest selloff in eight months and enough to lead the PHLX Semiconductor Index's SOX decliners in afternoon trading. At the same time, Coherent shares ran up 22.9% - their biggest one-day gain since climbing 21% on May 12, 2020 - to lead the chip-sector tracker's gainers.
Lattice's stock selloff wiped out about $1.58 billion in market capitalization, while Coherent's stock rally added nearly $1.99 billion to the company's market cap.
With that $3.57 billion swing, Lattice's market cap fell to $8.63 billion, well below Coherent's current market cap of $10.69 billion.
It's no wonder the stocks are moving that much. Since the end of September 2018, when Anderson became CEO, Lattice's stock had rocketed 691% through Friday, while Coherent shares had run up 45%. Over the same time, the PHLX Semiconductor Index soared 275% and the S&P 500 index SPX rallied 81%.
"We are somewhat surprised by the departure given Anderson's strong track record and the fact that he is joining a smaller-market-cap company (prior to the announcement)," wrote Raymond James analyst Srini Pajjuri in a note to clients.
Pajjuri noted that Lattice's revenue grew at a 14% compounded annual growth rate over the past five years, to outperform its field-programmable gate array peers by about 3.4% during that time.
Pajjuri said whatever the reasons for Anderson's departure, he is not expecting many changes to the company's strategy and longer-term growth prospects.
-Tomi Kilgore
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 03, 2024 16:35 ET (20:35 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
Comments