Rambus Reshuffle Can't Trump Turnaround

The CFO's departure won't slow a stock that has more than doubled in three months.
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There's a certain element of flattery when an executive's departure causes investors to sell off the company's stock. After all, if the news sends the stock up, it doesn't say much about the Street's perception of that executive.

So

Rambus

(RMBS) - Get Report

CFO Robert K. Eulau might have taken it as a backhanded compliment when the company's shares initially dropped more than 5% in extended trading Tuesday, after the surprise announcement that he was jumping ship.

Truth be told, say analysts, Rambus is one company where the CFO's exit has about as little bearing on the company as the departure of the head IT systems administrator.

"Where I think Bob is a great executive, I think he's in a role that's replaceable," said Pacific American Securities Director of Research Michael Cohen, who personally owns shares of Rambus.

Since Rambus is an engineering and legal-driven company, says Cohen, its fate is much more closely tied to executives such as General Counsel John Danforth, who has "been driving shareholder value at Rambus probably more than any other employee."

According to Rambus, Eulau will resign from Rambus on March 2 to pursue "another opportunity."

"Bob has made a significant contribution to Rambus for nearly five years, and we are saddened to see him depart, but wish him well in his new opportunity," said Rambus CEO Harold Hughes in a statement accompanying the announcement.

A company spokesperson said Rambus has begun the search for a successor to Eulau, looking both internally and externally. The company's finances would appear to be in good hands in the short term, as Hughes temporarily puts on the CFO hat: He formerly served as CFO at

Intel

(INTC) - Get Report

for part of his 23-year stint with the Santa Clara, Calif. chipmaker.

But the timing of Eulau's exit certainly raises some questions. Rambus announced its quarterly earnings only a few weeks earlier, and that's the usual venue for announcing such a departure.

And the departure is particularly puzzling given that Rambus' prospects have been looking better in recent months.

In January, the company

scored an important legal victory, putting it in good stead as it nears its March trial with

Hynix Semiconductor

. Rambus also recently announced a

$75 million licensing deal with

Advanced Micro Devices

(AMD) - Get Report

, which some industry watchers believe could be the first taste of a significant new revenue stream for the company.

Investors have warmed to the story, more than doubling the stock's value since Nov. 1.

But for Eulau, a chance to get in on the ground floor of the next big thing may have been too good to pass up.

According to several analysts, Eulau is moving to a pre-IPO semiconductor company, although which company is still not known. Eulau joined Rambus in 2001, so it's likely that his stock options and share grants were much less attractive than those of executives who came on board before Rambus went public.

"I don't think it's a reason to worry that the story of Rambus is cracked," says WR Hambrecht analyst Daniel Amir, who doesn't have a stake in the company. "The fact that it's coming right around this timing is unfortunate. But the company will do well with or without Bob."