Covad CEO Resigns
The chief executive officer and chairman of the board for Covad Communications (www.covad.com), Robert E. Knowling, announced his resignation today. The company has appointed former CEO and Covad founder, Charles McMinn, as the company's chairman of the board, and Frank Marshall, as the interim CEO. The new appointments are effective immediately.
Two weeks ago, Covad announced a larger than expected loss for the third quarter. Covad's loss was $189.9 million, an increase from its second quarter loss of $131.5 million. Covad's stock is currently trading for around $6/share, as compared to its 52-week high in March of $66 43/64.
In its third quarter statement, Covad blamed its growing losses partly on the inability of smaller ISPs to pay their outstanding debts. The amount of outstanding debt owed by these ISPs was $11.4 million; however, this only accounts for a fraction of Covad's $58.4 million in increased third quarter losses.
Covad's board of directors felt that, in light of the company's disappointing market performance, a change in leadership was to its benefit.
"Our objective will be to execute this change in leadership along with a continuing focus on achieving cash flow positive status as quickly as possible while maintaining our leadership position as a national broadband service provider," stated Marshall.
Covad states that its network passes 47 million homes and businesses, and as of September 30th of this year, it has installed 205,000 subscriber lines.