Oracle departing exec says stock slump an overreaction
Gary Bloom, former executive VP, Oracle
Oracle shares tumbled nearly 15 percent after word of Bloom's departure reached investors. In regular trading, Oracle stock closed at $28.81, up $1.44 for the day. In after-hours trading, however, the shares slipped to $24.75, according to Island ECN, an electronic network that tracks late trades.
Meanwhile, Veritas' shares closed down nearly 9 percent, or $10.81, to $110.19 Friday as the company notified Wall Street it would have an announcement later in the day. In after-hours trading, shares in the maker of business software rose to $114.50.
Analyst Rick Sherlund of Goldman Sachs said Bloom's departure "is not good; he's a valued employee."
But he added that "there's nothing wrong at Oracle, it's just a great opportunity for (Bloom)...He gets to run a great company."
Bloom's duties will be distributed among senior Oracle executives, the company stated in a release. Bloom said he plans to work at both companies until he assumes his new post at Veritas on Dec. 15.
His departure follows the June resignation of president Ray Lane, who has since joined powerful Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers. As Lane was Ellison's likely heir apparent, his departure sparked speculation about other possible successors.
"Oracle is clearly under Larry's leadership," Bloom said Friday, noting that Ellison is expected to head Oracle for the foreseeable future. "There's an incredible management team at Oracle...and world-class executives that helped me look good."
Veritas, a business software provider, has been quietly seeking a new CEO for the past six months. Mark Leslie, Veritas chief executive and chairman, will be giving up his CEO role but will remain chairman.
Veritas and Oracle operate a partnership, which likely gave Bloom a key vantage point for learning about his new employer--and gave Veritas a chance to observe Bloom.
Although Veritas lured away Bloom, the partnership is expected to remain intact, executives for both companies said.
"I think the partnership will strengthen. I don't think it will weaken at all," Bloom said.
Ellison issued similar comments.
"Gary is joining a key Oracle partner," Ellison said in a statement. "With Gary at Veritas Software, we expect an already close relationship to grow even closer."