When was the revolving door installed at Covad Communications?
Covad Chairman, President and Chief Executive Officer Robert E. Knowling resigned Wednesday on the heels of last week’s announcement of a third quarter net loss of $189.9 million, about $1.22 per share.
Who will take Knowling’s place? The new chairman is Charles McMinn, a founder of the broadband services provider, and, incidentally, the man Knowling shouldered out of the role last year. Frank Marshall, a member of the board, will take over as interim CEO.
McMinn was chairman and CEO of Covad from its founding in 1997. He gave up the CEO role to Knowling in 1998. Knowling took the chairmanship in 1999.
Covad’s wider-than-expected loss has been attributed to late-paying ISPs. The company reported $12 million in non-recognized revenue for the quarter.
Covad said both Knowling and the board agreed that new executive leadership would be in the company’s best interests in light of the market’s reaction to its third quarter.
“While we are pleased with many aspects of Covad’s performance, the board agrees with Bob’s assessment of the current environment and has accepted his resignation,” Marshall said. “Our objective will be to execute this change in leadership along with a continuing focus on achieving cash flow positive status as quickly as possible while maintaining our leadership position as a national broadband service provider.
“Bob has made significant contributions to Covad as he has focused the company on growing both its DSL footprint and its subscriber base.”
Industry watcher Dave Burstein, editor of DSL Prime, agreed that Knowling did an excellent job at Covad.
“Covad built the most efficient operation in the industry,” he said. “Money men are looking for scapegoats for the market fall.”
Shortly before close, Covad
stock was trading at $5.96, up 13 percent from its open of $5.31. The stock is still far off the 52-week high of $66 it set last March.