Today: The CEO of Gap, the Bay Area’s largest retailer, and AMD, Silicon Valley’s second largest chipmaker, announce departures within minutes of each other.
The Lead: Gap and AMD CEOs step aside
The Bay Area’s largest clothing company and Silicon Valley’s second largest chipmaker announced changes at the top Wednesday afternoon, with Gap CEO Glenn Murphy saying he will step down early next year and Advanced Micro Devices leader Rory Read stepping aside immediately.
San Francisco clothier Gap said Murphy will step down from the helm of the company at the end of its fiscal year on Feb. 1 and hand the job to the retail chain’s digital leader. AMD’s Read stepped aside immediately after three years leading the chipmaker for Lisa Su, the Sunnyvale firm’s chief operating officer and a former executive at Freescale Semiconductor and IBM.
“I am deeply honored to have this opportunity to lead AMD during this important time of transformation,” Su, the first female chief executive in the company’s history, said in AMD’s announcement. “Our world-class technology assets combined with the incredible talent and passion of the AMD team provide us with a unique opportunity to shape the future of computing.”
Gap’s Murphy will depart after seven years as CEO. Art Peck, who has been at the company since 2005, will take over after leading the company’s online efforts as well as Gap brands such as Athleta and Intermix.
“With consumer expectations rapidly evolving, Art is the right leader at the right time to build on our success and ensure a compelling experience for our customers across both our physical and digital channels,” Murphy said in Wednesday’s announcement.
“I’m passionate about product — at our core, we’re a product company,” Peck told Bloomberg News in an interview. “And I’m really passionate about digital and physical coming together.”
Murphy will also vacate his position as chairman of Gap’s board, a role that will be filled by Bob Fisher, scion of the Bay Area’s well-known Fisher family, which founded the retailer.
Gap is the largest clothing company based in the Bay Area, and the fifth-largest non-tech company in the region, based on annual sales. The company — which owns the Gap, Banana Republic and Old Navy brands along with others — recorded revenues of $16.15 billion in 2013.
AMD trails only Intel in the SV150’s chip sector, with $5.3 billion in 2013 sales, and is the 17th largest tech company in Silicon Valley. The chipmaker has struggled with declining sales of personal computers, a market that is dominated by its Santa Clara rival, but Read managed to have AMD chips placed in both next-generation gaming consoles last year, the Xbox One and PlayStation 4, helping push AMD closer to profitability.
“I am grateful to have had the opportunity to lead such a talented team and proud of what we have accomplished during such an important chapter in the company’s history,” Read said Wednesday.
Bloomberg News noted that the transition seems rushed, with AMD admitting in an SEC filing that it was still working on an employment agreement with Su and a severance with Read.
“The timing of it seems weird,” Sanford C. Bernstein analyst Stacy Rasgon told Bloomberg, later adding that Su “is probably thought better of than Rory by Wall Street at this time.”
Gap shares plunged in late trading following the announcement, dropping to around $38.50 after closing with a 1.4 percent gain at $41.90. AMD also dropped in after-hours action, declining to about $3.05 after closing with no change in price at $3.28.
SV150 market report: Wall Street bounces back as Apple confirms event
Wall Street enjoyed its best session of 2014 on Wednesday, rebounding from the previous day’s strong declines, as Apple moved back atop $100 while officially announcing another device debut and being the subject of Carl Icahn-spawned conjecture.
Apple sent members of the media an invitation to an event on Oct. 16, matching earlier reports that the Cupertino company would introduce new iPads and other gadgets on that date. Apple’s invitation said solely, “It’s been way too long,” providing no clue about the focus of the event, which will be held at the company’s headquarters unlike its recent iPhone and smartwatch debut. Another mystery took shape Wednesday afternoon, when activist investor Icahn tweeted that he would be sending an “interesting” letter to the company Thursday, with some observers speculating that Icahn would push Apple toward an acquisition, possibly even Netflix. The only official word out of Apple headquarters Wednesday was a statement that professed surprise at the bankruptcy of the gadget maker’s sapphire supplier, GT Advanced Technologies. Apple stock jumped 2.1 percent to $100.80, its first close higher than $100 since the end of September.
Symantec increased 3.5 percent to $24.01 after a report that the Mountain View security company was pondering spinning off its storage business, which would follow Hewlett-Packard in a wave of Silicon Valley corporate splits. Analysts, fittingly, were split in their reactions to Symantec’s possible move, with Citigroup analyst Walter Pritchard positing that Symantec could seek to sell off its storage business to another tech company after spinning it off. HP’s up-and-down ride since announcing its split headed back to the positive range, with shares adding 2 percent to $35.92 as CEO Meg Whitman divulged more details about the move to analysts. SolarCity gained 3.5 percent to $56.48 after introducing new loans meant to allow homeowners to eventually own their solar panels outright; Credit Suisse analyst Patrick Jobin suggested the move would be a boon for residential solar, telling the Associated Press, “The value proposition is becoming clearer and less complicated for consumers.”
Up: Gilead, Applied Materials, SolarCity, Symantec, Twitter, Adobe, eBay, Yelp, Intel, Netflix
Down: GoPro, Ruckus Wireless, Juniper, Tesla Motors
The SV150 index of Silicon Valley’s largest tech companies: Up 31.6, or 2.02 percent, to 1,599.07
The tech-heavy Nasdaq composite index: Up 83.39, or 1.9 percent, to 4,468.59
The blue chip Dow Jones industrial average: Up 274.83, or 1.64 percent, to 16,994.22
And the widely watched Standard & Poor’s 500 index: Up 33.79, or 1.75 percent, to 1,968.89
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