Shares of AMD slump following CEO's departure

Dirk Meyer, president and CEO of AMD, speaks during an Industry Insider session on the first day of the 2009 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 8, 2009. REUTERS/Steve Marcus

SAN FRANCISCO (Reuters) - Shares of Advanced Micro Devices Inc slumped after the unexpected resignation of its chief executive underscored doubts about the company’s strategy.

AMD’s stock fell 7.6 percent to $8.49 in noon trading as investors speculated about the reasons for 49-year-old Dirk Meyer’s departure announced on Monday after the market close.

As demand for smartphones and tablets explodes, AMD has steadily kept its focus on making microchips for personal computers and servers to compete against Intel.

AMD said the resignation of Dirk Meyer was the result of a “mutual agreement” with the board of directors and that Chief Financial Officer Thomas Seifert will become interim CEO, effective immediately, as the company looks for a permanent replacement.

“Strategically they didn’t feel like Dirk was taking them down the road they wanted to be on. They wanted to be on the Yellow Brick Road toward tablets and smartphones,” said Patrick Wang, an analyst at Wedbush. He said Meyer likely also clashed with the board over its strategy in the server market.

Consumers are increasingly turning to mobile gadgets like smartphones and tablets. Those devices typically use more power-efficient chips than the so-called x86-based processors sold by Intel and AMD that have served as the main processing brains of PCs for years.

Reporting by Noel Randewich; Editing by Tim Dobbyn