Computer maker AST today announced Soon-Taek (S.T.) Kim as president and chief executive officer after Young Soo (Y.S.) Kim resigned from both posts. Y.S. Kim, who said he is resigning for personal reasons, will remain a member of the AST board of directors.
S.T. Kim said his immediate priority is to restore confidence in AST's customers, vendors, and employees as Samsung works to complete the pending acquisition of AST.
Earlier this month, the companies signed a definitive merger agreement in which Samsung will acquire all outstanding AST shares not currently owned by Samsung or its affiliates for $5.40 per share, in cash. AST's stock closed Friday at 5-3/16.
Jay Vleeschhouwer, an analyst with Josephthal Lyon & Ross, said this maneuver is a fairly routine management change for merging companies. "AST is going to disappear into Samsung...There has been lots of transitions in management in an attempt to further the turn around at AST," he said.
He added that AST has had minimal contact with Wall Street analysts over the past couple of months as Samsung swallows the company piece by piece. "This has been a long downward spiral and clearly Samsung is only thing that is keeping AST afloat."
S.T. Kim was formerly CEO of Samsung Heavy Industries. He has served in senior-level executive positions at Samsung since 1985.
Kim said that AST will remain in its current Irvine, California, headquarters.
Last week, the computer company announced it would eliminate 25 percent of its workforce--about 4,100 employees worldwide--after reporting a first-quarter loss more than three times greater than had been expected.
The company attributed the losses to lower demand, a competitive pricing environment, and "product transition" for its commercial desktop and notebook product lines.
AST could not be reached for comment.