SAP Slumps on Shock of CEO Departure

WALLDORF, Germany ( TheStreet) -- SAP's ( SAP) shares slumped in early trading on Monday as investors responded to the surprise resignation of CEO Leo Apotheker, which came less than a year after he took over the company's hotseat.
Leo Apotheker
SAP's CEO Leo Apotheker unexpectedly resigned.

The software maker has been struggling with falling sales and an increasingly competitive landscape, prompting the CEO reshuffle. SAP's stock slumped $1.44, or 3.13%, to $44.52 shortly after market open, outpacing the Nasdaq, which fell 0.34%.

Previously rumored as an acquisition target for Microsoft ( MSFT), SAP has also been cited as an attractive target for IBM ( IBM), which attempted to buy Sun ( JAVA) before Oracle ( ORCL) stepped in last year.

SAP has always maintained its desire to remain independent, although the company's recent financial performance may have made it more vulnerable to a possible takeover.

Apotheker had been the company's sole CEO since May 2009, and his shock departure underlines SAP's desire to rejuvenate its flagging business. The company is facing stiff competition from Oracle/Sun and IBM, and its profit slumped 12% in its recent fourth-quarter results.

Set against this backdrop, at least one analyst thinks that the company wants to draw a line under a tough period in its history.

"Our view is that by letting Apotheker go after only nine months as sole CEO, SAP is acknowledging the depths of its current issues," wrote Pat Walravens, an analyst at JMP Securities, in a note released on Monday. "These issues include a convoluted product strategy, loss of market share to Oracle, and trouble adapting to the cloud computing model."

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