IBM’s share price fell 5% at one point as its president leaves office

Jim Whitehurst, an important figure in IBM, will step down as president. Prior to that, Whitehurst joined IBM because of the acquisition of red hat, an open source software company, and took office as president of IBM for more than a year. Despite stepping down as president, Whitehurst will continue to serve as a senior consultant, serving Arvind Krishna, the current CEO, and the executive leadership team.
Whitehurst’s departure will be a challenge for IBM. In the first quarter of this year, red hat’s revenue grew by 17%, while IBM’s overall revenue grew by only 1%. After the news, IBM’s share price fell 5%.
Arvind Krishna, IBM’s chief executive, confirmed the changes in an article on the company’s website. He also said:
Jim Whitehurst played a key role in the integration of IBM and red hat. Nearly three years after the announcement, he played an important role in elaborating IBM’s strategy. Not only that, he also plays an important role in ensuring that IBM and red hat work well together, and that technology platforms and innovation can provide more value to customers.
According to public information, Jim Whitehurst joined IBM in 2019 and became president of IBM in April 2020. At that time, IBM acquired red hat company for $34 billion, which was officially completed in mid-2019. Prior to that, he has been president and CEO of red hat since 2008.
In the first quarter of this year before he left office, driven by the growth of cloud and other major businesses, IBM’s business revenue did not decline as expected, on the contrary, it was the fastest year-on-year growth in nearly three years. According to the financial data previously released, IBM’s operating revenue in the first quarter of this year recorded US $17.73 billion, higher than analysts’ expected median of US $17.32 billion, and also higher than Wall Street’s expected high-end level of US $17.54 billion, a year-on-year increase of 0.9%, reversing the trend of declining revenue for four consecutive quarters. In addition, IBM’s total cloud business revenue in the first quarter was $6.5 billion, up 21%, while red hat’s revenue in the first quarter was $34 billion, up 17%.
IBM’s share price opened at less than 1%, but it dropped sharply after the news of leaving office was announced at about 10:30 (US Eastern time) on Friday. At the deepest point, it fell to 5%, and then the decline remained at more than 4%. At the end of the day, IBM reported $140.02 per share, down 4.64%.

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