Analyst Calls Resignation of MEMC's (WFR) CEO 'Incremental Negative'

Hapoalim Securities is out with a research note on MEMC Electronic Materials (NYSE: WFR), following news from the company that its President and CEO, Nabeel Gareeb, announced his resignation this morning. MEMC's Board has named Marshall Turner as the company's interim CEO, effective November 12, 2008. The firm calls the management news "an incremental negative" and reiterates its cautious outlook and $17 near-term price target.

The firm believes that "over the past 7 years, Mr. Gareeb has proven to be one of the most aggressive and effective negotiators under the polysilicon umbrella, transforming MEMC into a market leading polysilicon powerhouse with a very impressive backlog of contracts." Hapoalim says that while it is generally more negative on MEMC's stock than other analysts, its positive commentary on the company has stemmed from strong management team, "driven mainly by Mr. Gareeb's uncanny ability to execute on strong contract negotiations."

Given uncertainty in the solar and semiconductor sectors, and now management concerns, Hapoalim says that it will "look for color on his [Gareeb] replacement before revisiting" its more cautious near-term outlook.

Traders are certainly responding to the management news negatively today: after opening today's trading session at the same level as yesterday's close, shares of MEMC plunged as much as 18%, setting a new 52-week low at $13.88, but have now rebounded. The stock most recently traded at $15.61, down 8.1% on the session.

MEMC Electronic Materials, Inc. designs, manufactures, and sells silicon wafers for the semiconductor industry worldwide.

You May Also Be Interested In

• Morgan Stanley Double Downgrades Gujarat Energy (GUJENERG:IN) to Underweight
• Deutsche Bank Upgrades Bytes Technology Group PLC (BYIT:LN) to Buy
• Deutsche Bank Upgrades Cerillion plc (CER:LN) to Buy