Cow or not? One person jumped ship, causing the market value ranking of two American chip companies to be "reversed" in one day

Finance Associated Press

2024-06-04 15:24Published on the official account of Cailianpress, a subsidiary of Shanghai Shanghai Poster Industry Group

Finance Associated Press, June 4 (edited by Xiaoxiang) in Lattice Semiconductor Corp. Lattice Semiconductor's shares plunged on Monday after the CEO left to join its chip-industry rival Coherent, while Coherent's shares soared for their best day in four years, with the two companies' market capitalization rankings "reversed" in a single day......

Lattice Semiconductor's CEO Jim Anderson, who has stepped down as CEO effective immediately after about six years in office, will "seek opportunities to serve at another company," according to an announcement made earlier Monday local time.

Lattice said it has appointed chief marketing and strategy officer Esam Elashmawi as interim chief executive officer and is looking for a successor to Anderson.

Just minutes later, chip and optical component manufacturer Coherent announced that it would appoint Anderson as CEO, effective immediately. The company's former CEO, Vincent Mattera, announced his retirement four months ago.

The news sent Lattice shares plunged 15.5% on Monday, their biggest drop in eight months, and led the decline in the Philadelphia Semiconductor Index during the afternoon session.

Coherent, meanwhile, surged 22.9% on Monday, its biggest one-day gain since May 2020, leading the chip sector index on the day.

In terms of market capitalization, Lattice's plunge wiped out about $1.58 billion in a single day, while Coherent's rally added nearly $1.99 billion to the company's market capitalization. As a result of this $3.57 billion trade-off, Lattice's market capitalization has fallen to $8.63 billion after Monday's close, overtaking Coherent, which is now worth about $10.69 billion.

According to statistics, from the time Anderson became CEO at the end of September 2018 to last Friday, Lattice's stock price soared by 691% during his tenure, while Coherent rose only 45% over the same period.

For comparison, the Philadelphia Semiconductor Index rose 275% and the S&P 500 rose 81% over the period.

In a note to clients, Raymond James analyst Srini Pajjuri wrote, "Given Anderson's proven track record and his eventual choice to join a company with a relatively smaller market capitalization (before jumping ship), we were somewhat surprised by his departure." ”

Pajjuri noted that Lattice's revenue has grown at a CAGR of 14% over the past five years, which is about 3.4 percentage points higher than its peers, which also develop field-programmable gate array (FPGA) products. However, Pajjuri doesn't expect Lattice's strategy and long-term outlook to change much, regardless of the reasons for Anderson's departure.

Prior to joining Lattice in 2018, Anderson served as senior vice president and general manager of AMD's Compute and Graphics business unit, according to publicly available information. Previously, he held leadership roles in general management, engineering, sales, marketing, and strategy at companies such as Intel, Broadcom (formerly Avago Technologies), and LSI Corporation.

At Lattice, Anderson was responsible for corporate strategy and delivered record operating profit and gross margin for the company during his tenure.

"Anderson's business acumen and technical capabilities, combined with his extensive experience in restructuring complex global businesses to achieve above-market growth and profitability, position him to be the ideal leader to lead Coherent into a new chapter in a rapidly changing market," Coherent's Chairman of the Board of Directors, Enrico DiGirolamo, said in a statement. ”

(Finance Associated Press Xiaoxiang)

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