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Top Execs Out at Recent High-Flier

Isilon Systems' share price, which had risen as high as $28 after a $13 IPO last year, has crashed to $5 and change.
Stephen TaubOctober 24, 2007

The CFO and CEO of Isilon Systems, whose stock was a Wall Street darling earlier this year, have left the company, which has had several disappointing quarters recently and seen its stock price plummet.

Taking over for the former CFO, Stu Fuhlendorf, is controller Bill Richter, who will head up finance until a permanent replacement is found. The new CEO is company founder Sujal Patel, who had been chief technology officer. He replaces Steve Goldman.

Isilon, a maker of clustered storage systems and software for digital content and unstructured data, postponed the reporting of its third-quarter results and a related investor conference call that had been scheduled for October 25.

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Earlier this month, the company announced preliminary results for the third quarter. It said total revenue was expected to be down about 6 to 8 percent from the second quarter of 2007 and up about 30 to 33 percent from the year-ago third quarter. That expectation was down 10 to 15 percent from what the company forecasted on a conference call in late July.

Isilon went public late last year at $13 a share and the stock swiftly surged to a high of about $28. However, by Wednesday, when it fell more than 5 percent, the share price stood at $5.65.

An Isilon spokesman did not give a precise reason for the executives’ departures, saying only that the company “has an incredible business opportunity but we needed new leadership to take advantage of it. There were some execution issues in two recent quarters that we had we needed to address.”

In a statement, Isilon chairman William Ruckelshaus said, “We believe there is no better person to run Isilon now than our visionary founder Sujal Patel, who has helped build and run this company over the past seven years.”