Flash storage provider Violin Memory Inc's board fired its CEO in the wake of a sour IPO and deeper-than-expected quarterly losses, sending its shares sharply higher.
In a news release on Monday, the maker of memory arrays for data centers named chairman Howard Bain III interim CEO and said its board has started a process to find a permanent replacement.
"Mr. Bain's appointment follows the decision of the Board of Directors to terminate Donald Basile as Chief Executive Officer," the company said.
Small data storage companies developing and selling high-end storage equipment made from flash chips have been facing growing competition from larger rivals like EMC Corp, IBM Corp, NetApp Inc, Hewlett-Packard Co and Cisco Systems Inc.
In its stock market debut in September, Violin Memory's shares dropped about 22 percent due to concerns about competition.
Then in November, Violin Memory posted a far bigger-than-expected quarterly loss, sending its shares down nearly 50 percent.
Violin's poor performance stands in contrast to rival Nimble Storage, which makes storage devices that combine hard disks and flash drives. Nimble's stock jumped over 60 percent in its market debut on Friday.
Violin Memory's shares, which were priced at $9 each in its IPO, on Monday traded at $3.08, up 14.5 percent from the day before.
"This leadership change is necessary to enhance the management team's operational focus and ability to execute the company's plans for profitable growth," Violin Memory said.
Basile formerly headed flash storage provider Fusion-IO before moving to Violin Memory.
(Reporting by Neha Alawadhi in Bangalore; Editing by Joyjeet Das and Bob Burgdorfer)