Intel stock drops as it appoints new CEO
Intel shares fall after picking Robert Swan as its new CEO.
Intel stock is down after choosing a new chief executive officer (CEO), Robert Swan. Intel stock fell by as much as 2% after hiring its new CEO.
Why is Intel stock falling?
Robert Swan was the interim CEO for seven months before being chosen as the permanent head of the chipmaking company. Swan is considered an outsider because he was the company’s chief financial officer, breaking with tradition of hiring engineers to head Intel. He expressed his happiness with taking on the new role in a statement.
‘In my role as interim CEO, I've developed an even deeper understanding of Intel's opportunities and challenges, our people and our customers. When I was first named interim CEO, I was immediately focused on running the company and working with our customers. When the board approached me to take on the role permanently, I jumped at the chance to lead this special company,’ said Swan.
Though Swan is the new chief, Intel is still encountering old problems. The stock fell in after its last disappointing fourth quarter (Q4) earnings report. Declining sales of cloud provider service chips in China have led to the corporation’s plummeting stock price.
Investors may also be disillusioned with Intel choosing a financial expert instead of experienced engineer to head the company. Some financial analysts also feel that Intel hiring Swan leaves room for rival chip maker Advanced Micro Devices(AMD) to gain ground as Intel struggles to increase sales.
What’s next for Intel?
After Intel’s last earnings report, the chip maker gave worse-than-expected guidance for Q1 2019 as the company struggles to increase sales in China. Financial analyst, Stacey Rasgon, believes that Swan can being a strong leader and turn Intel around if he depends on other technologists to help him.
‘He will keep the ship afloat. At the same time, the ship’s heading isn’t going to change, potentially disappointing some investors who might feel that bolder steps are needed and/or are worried as to what might lie ahead in the waters. And Bob is not a technologist, so will have to rely on advisers to make critical decisions around the technology road map,’ said Rasgon.
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