Violin Memory, a flash storage company that IPOed two months ago, just fired its CEO,Don Basile, the company announced in a press release on Monday.
We had heard rumblings that Besile might be fired last week when the company confirmed to us that CTO Jonathan Goldrick was out.
Violin Memory offers products in a hot new area called enterprise flash storage systems. Flash storage is a hardware product installed in a corporate data center that uses flash memory to store documents and other data. Flash is the same technology used in thumb drives and smartphones and is faster, but more expensive, than traditional hard drives.
Basile led Violin through its IPO in September. It raised $US162 million by selling shares for $US9, but on opening day the stock fell to about $US7.
Investors were likely scared off by how quickly Violin was burning through its cash, the fact that its one-time partner HP started competing with it by also selling flash memory, and by its struggles to find new customers, we reported at the time.
When we asked Basile about the stock’s performance on opening day, he told Business Insider, “What the market does on any given day is not really a concern of ours.”
On November 22, the company reported its first earnings: a loss of $US0.66 per share and an adjusted loss of $US0.85 per share. Analysts had expected a loss of $US0.44 per share. Multiple Wall Street analysts downgraded the stock and share prices plunged nearly 46% to about $US3.
Meanwhile, 2011 IPO darling and one of Violin’s top competitors Fusion-io has been struggling, too. (Basile was the CEO of Fusion-io before Violin poached him in 2009.)
Another Violin competitor, Nimble Storage, just had a very successful IPO last week, with shares popping over 60% on the first day, from $US21 to about $US34. As of today the stock is trading at over $US36.
Nimble’s IPO proves that investors aren’t soured on the flash storage industry. In fact, they’re eager to invest in an industry that promises to blossom into a $US1.2 billion market by 2015, according to market research firm IDC.
Violin’s current chairman of the board, Howard Bain, is taking over as interim CEO. He’s been chairman since August and a director since October 2012. He was previously CFO at Portal Software, Vicinity, Informix, and Symantec.
Violin’s stock is up slightly on the news, trading at $US3.23.