Red Hat announced Monday that its chief financial officer (CFO), Kevin Thompson, will soon be leaving the company. The news came a few days before the Linux vendor is due to announce it quarterly financial results.
Thompson, who has been with Red Hat for nearly four years, is leaving to pursue other interests and spend more time with his family. He is expected to stay on until a replacement has been found, Red Hat, of Raleigh, North Carolina, said in a statement.
Shares in Red Hat (RHAT) were down US$2.98, or 12.26 percent, in after-hours trading after the resignation was announced. Earlier Monday, when regular trading closed on the Nasdaq stock market, the stock closed down 5.3 percent at US$24.30.
Red Hat is scheduled to announce results for its 2005 fiscal first quarter on Thursday. It is expected to post earnings per share of US$0.04 on revenue of US$43 million for the three-month period ended May 31, according to a consensus estimate compiled by Thomson First Call.
Thompson has played a key role in moving Red Hat from primarily a services model to a subscription pricing model, said Stacey Quandt, a principal with Quandt Analytics, an industry research firm.
"Kevin had the hard job of figuring out their subscription model," she said. "They had a services model for a long time and he went to the subscription model. He was a key member of Red Hat, intricately involved."
While a sudden departure of a CFO usually means bad news, in Thompson's case, he truly wants to spend more time with his wife and young sons, said Amy Feng, a senior research analyst at investment bank JMP Securities.
"I asked him pretty plainly, nine times out of ten when a CFO of your caliber resigns, that means a company is heading towards a significant ditch. He said that he saw no ditch," Feng said. "He probably won't retire for the rest of his life, but he is retiring for now."
Feng, who doesn't own any Red Hat stock and has not done any banking business with the company, is recommending her sales force to use the dip in Red Hat shares as a buying opportunity, she said.
(Robert McMillan in contributed to this report.)