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CSCO's KENNEDY REEADY TO LEAVE???
by: cartmanlovesdvd 07/26/01 07:26 pm
Msg: 48229 of 48237
He's selling a lot of cisco shares, just like Ragavan did before he left
lightreading.com
A rift between Kevin J. Kennedy, senior vice president of Cisco Systems Inc.'s service provider line of business, and John Chambers, Cisco's CEO and president, has resulted in Kennedy considering other positions, sources say.
As reported by Light Reading yesterday, Wall Street is abuzz with rumors that Kennedy is being considered for CEO posts at either Redback Networks Inc. (Nasdaq: RBAK - message board) or Nortel Networks Corp. (NYSE/Toronto: NT - message board) (see Cisco's Kennedy: Recruiter's Dream? ).
Today's dose of scuttlebutt has it that Kennedy is seriously considering the Redback deal, not the Nortel move.
Observers cite two reasons Kennedy may want to leave Cisco Systems Inc. (Nasdaq: CSCO - message board). First, he wants the opportunity to lead a company. Second: "It's widely known that the chemistry between Kennedy and Chambers has been atrocious for the last three months," says a source at Cisco, who requested anonymity.
Filings with the SEC indicate that Kennedy has recently been heavily selling his Cisco position. In May, Kennedy filed to sell 627,000 shares of Cisco at about $19 apiece, yielding gross proceeds of $11.9 million dollars. In the same month he exercised 300,000 shares at strike prices of $5.81 and $4.33, leaving him with a tidy profit on those options.
Executives looking to switch companies have three choices: a startup, an established player, or a public turnaround candidate. Of the three, a turnaround company is the hardest gig. And Redback clearly falls into that category. Redback's stock price has fallen faster and farther than that of its competitors -- losing more than 95 percent of its value in the last 12 months (see Redback: How Low Can It Go? ). In the past two quarters, Redback has reported brutal losses.
How would such a transition affect to business and/or the stock of either Cisco or Redback? Many investors were skeptical that Wall Street would have a big reaction in either direction............. |
