Shares of VMware Inc. plunged 25 percent Tuesday after the software maker replaced co-founder and CEO Diane Greene and warned that revenue would fall short of prior estimates.
VMware, which is controlled by data-management provider EMC Corp., has fallen mightily since a blockbuster partial spinoff last year. After its initial public offering in August, VMware stock tripled from its $29 opening price in the first month _ the biggest technology IPO since Google Inc. went public in 2004.
But since hitting a 52-week high of $125.25 in October, the shares have lost nearly 70 percent of their value.
VMware, whose virtualization technology lets one computer act as multiple machines running different operating systems, said it had replaced Greene with former Microsoft executive Paul Maritz, effective immediately.
The company made the move as it revealed that fiscal 2008 revenue will fall "modestly" below prior guidance, which had called for 50 percent growth from last year's $1.33 billion in sales.
On average, analysts surveyed by Thomson Financial were expecting revenue of $2 billion for this year.
Shares dropped $13.52, 25 percent, in morning trading to $39.67.
VMware also named Maritz as a director. Maritz left Microsoft in 2000, after 14 years there. He managed development and marketing of many of the company's major products, including Windows 95 and Windows NT.
In 2003, he founded Pi Corp., a software startup focused on building remotely hosted software. Pi was acquired by EMC in February, and Maritz became president of EMC's "cloud computing" division.
VMware is scheduled to report quarterly earnings on July 22.
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