Rumor of Departure Dogs Veritas Shares

Shares of Veritas Software(VRTS Quote - Cramer on VRTS - Stock Picks) fell to their lowest level in more than three years this week as more rumors of an executive departure swirled around the storage software maker.

Shares of Veritas sank to as low as $15.25 Friday, falling under the previous 52-week intraday low set Thursday before bouncing back to $15.92, up 1% from Thursday's close. Friday's $15.25 price was the lowest intraday for the Mountain View, Calif.-based software maker since May 1999.

A number of executives have left Veritas in recent months, but at the same time, rumors of others on their way out have proven untrue and have led to declines in the stock. On Friday, Veritas spokeswoman Julia Glenister denied the latest rumor -- that Paul Sallaberry, executive vice president of worldwide field operations, was leaving the company.

"It's not true that Paul Sallaberry has left," she said. She added that she did not know of any plans he had to leave.

Similarly, the company has denied other rumors in the past. However, the company also has confirmed a fair share of executive departures in recent months. Among the executives who have jumped ship: Howard Silver, vice president/general manager of the appliance software division; Neal Ater, senior vice president of the data protection product group; and Michael Howard, vice president and general manager of the Internet division.

Prashant Dholakia, senior vice president of the availability products group, has said he plans to leave Veritas but is still working on special projects there. Ater and Howard went on to become CEOs of other smaller tech companies.

A.G. Edwards analyst Shebly Seyrafi said he believes Veritas shares have been pushed downward the past few days by the rumors about Sallaberry, combined with the weak tech tape and slowdown of sales at Sun Microsystems(SUNW Quote - Cramer on SUNW - Stock Picks), a sizable driver of Veritas business. Seyrafi has a buy rating on Veritas and his firm hasn't done any banking with the company. A.G. Edwards expects to receive or intends to seek compensation for investment banking business services from Veritas within the next three months.

However, Seyrafi said he doesn't think there's any single explanation for the rash of executive departure rumors -- "other than [CEO] Gary Bloom putting his foot down and trying to make sure his house is in order."

Glenister said Friday that there is no movement afoot at Veritas to clean house within the management ranks.