Shares of Hewlett Packard Enterprise fell after Chief Executive Officer Meg Whitman’s decision to step down from the role took Wall Street by surprise.
Whitman, one the most high-profile executives in the United States, said on Tuesday she would quit as CEO in February and hand over the reins to company veteran Antonio Neri.
After reports surfaced that she was being considered for the top job at Uber, Whitman reinforced her dedication to the role in July by saying that she was fully committed to HPE and planned to remain CEO.
"We have a lot of work still to do at HPE and I am not going anywhere. Uber's CEO will not be Meg Whitman," she had tweeted.
Whitman told CNBC that talks with Uber had not been a factor in her decision to leave HPE "at all".
But her move caught analysts off guard. HPE is in the middle of a restructuring to cut costs, invest in research and focus on high-margin businesses. Its mainstay server business has been struggling as customers increasingly buy non-branded, assembled servers that are much cheaper.
"We are surprised by the timing of the CEO transition given commentary at the recent analyst day that seemed to imply a CEO transition was not in the offing," BMO Capital Markets analyst Tim Long said in a research note. Long, however, added that Neri’s experience running the company’s Enterprise Group made him a strong fit for the CEO role.
The restructuring, which was announced last month and called HPE Next, was supposed to be led by Neri - a computer engineer who has spent more than two decades with the company and is HPE’s current president.