FutureLink Changes Chiefs; Stock Soars

Investors bid up the depressed shares of Lake Forest computer-services provider FutureLink Corp. by as much as 81% during trading Tuesday after the company announced sweeping management changes.

The company appointed Howard E. Taylor as chief executive and president and named Richard M. White as executive vice president and chief financial officer.

The stock, which had fallen from a 52-week high of $38.50 in March to a low of 63 cents last month, jumped 56 cents, or 69%, to close at $1.38 a share. During trading, the price hit $1.47 a share.

Wall Street’s response was a positive sign for a company that has been plagued by troubles in recent months, from weak earnings to job cuts and dirt-cheap stock prices.

“The company’s had some difficulties as the market for its [Internet application services] has not grown as rapidly as once anticipated,” said C.E. Unterberg, Towbin analyst William G. Dering.

Apparently, some investors are betting that the application service provider’s appointment of Taylor and White will bring the changes needed for FutureLink to recover.

Taylor, formerly a venture operating partner at Pequot Capital Management, one of FutureLink’s larger shareholders, replaces Glen Holmes as president and Philip Ladouceur as chief executive.

Holmes will remain a director and Ladouceur remains chairman.

White, who was FutureLink’s senior vice president, replaces Raghu Kilambi, who resigned for personal reasons, according to the company.

Ladouceur said investor reaction to the management changes is “within my expectations.”

“I think the company’s prospects are more positive because [the new officers] bring senior-level management to the company,” he said.

Pequot Capital owns about 10.3 million shares of FutureLink, according to Ladouceur, and has invested more than $80 million. As of Monday, FutureLink had about 68.1 million common shares outstanding.