Convergent Communications Inc. (Nasdaq: CONV), a recently public data and voice communications services provider, fell 14 percent Thursday on news that chief financial officer John J. Phibbs resigned.
The departure of Phibbs so soon after the company's IPO made investors jumpy.
Convergent shares were off 1 13/16 to 10 7/8 early Wednesday, well below their initial offering price of $15 each. Convergent's July 23 IPO put 8.9 million shares on the market, netting about $123 million for the company. Earnings reported just last week brought shares close to their IPO price again. The company reported a second quarter loss of $23.3 million, or $1.64 a share, on sales of $36.6 million. First Call had no consensus estimate for the company.
This week, Goldman Sachs, lead underwriter for Convergent's IPO, started its coverage with a rating of "market outperform." JP Morgan one of the IPO's co-managers, also started it at a "buy." The bullish ratings failed to affect Convergent's market value noticeably.
Phibbs, 37, is leaving to pursue other interests, the company said in a statement. His pockets are well padded for whatever interests he's chasing as Phibbs' base salary was $130,000 per year and was increased to $175,000 on November 1, 1998. He had also vested roughly 40 percent of his options. Phibbs' employment commenced on March 3, 1997, and 20 percent of the options to purchase shares vest on each anniversary of the date of grant, according to his contract. He was granted 150,000 options with a strike price of $2 in 1997, according to the company's regulatory filings.
Phibbs has been executive vice president, chief financial officer and treasurer since 1997. He also served as the company's vice president of finance and administration.
Before joining Convergent, Phibbs held various financial positions from 1991 through February 1997 with ICG, including Vice President of Accounting and Vice President of Financial Planning and Analysis. From 1985 to 1991, Phibbs was employed in various financial positions at Lockheed Martin Corporation and McDonnell Douglas Corporation.
Vice President of Finance Steven Hansen will serve as acting chief financial officer until a replacement was named. Convergent has initiated a search for a CFO, said CEO John R. Evans in a company release.