Andrew Mason was recently fired as CEO of
). His final act was to write a goodbye to his former coworkers in
which he joked around. Suggesting that he was headed to a fat farm
and compare the job of CEO to a video game was probably not what
investors wanted to hear.
The question in my head was what should investors do now?
I decided to take a look back a CEO's that were fired or pushed out
or quit and see how the stock acted. Does the change at the top
warrant a short term trading buy or maybe even a long term
First To Mind
The first CEO that came to mind was Vikram Pandit of
) who was pushed out on October 16 when the stock was $39 and
change. At the time, the move was quite shocking, and investors did
not rush to buy the stock. Instead the stock sold off for several
weeks and bottomed out at $34.39 in the first week of December.
From that point on, though, the stock has not really looked back
and was as high as $44.50 back on February 19.
Investors decided that the company was in good hands with new CEO.
And by good hands I mean all six of them. Three guys are in to do
the work of one, but the measure that trumps all measures is share
performance, and it has been good since early December.
Has been in the news for all sorts of reasons lately. The founder
was looking to take the whole company private and management
recently took big steps to no longer be a showroom for online
But if you rewind the story by to April 1, 2012 you get some
insight into how the snowball started rolling. The CEO at the time
was Brian Dunn and he quit amid a personal scandal. The company
moved to bring in some fresh blood and they went all the way to
France to pick up Hubert Joly. Since Dunn left, all the issues have
been just too much for investors to stomach and
) is down around 20%.
Best Buy and Citigroup are two stocks that are not likely going to
tell us too much about how Groupon might behave following a CEO
change. For the next two, I will focus in on tech stocks. Both have
had a relatively poor history of late when it comes to leadership,
and both think they have found the answer with who is in place now.
Competition and a Scandal
Mark Hurd left the CEO office in August 2010 following a scandal,
the board huddled together to find a replacement that would help
address the needs company. Competition was coming from Dell and
Apple and a vision was needed to guide the company. Leo Apotheker
took over but held the position for about a year before he too was
removed and replaced by Meg Whitman.
Meg Whitman joined eBay in March 1998 and helped grow the company
to a multi-billion dollar enterprise. She left the company in
November 2007, just months after a shoving incident with a
subordinate. A few years later Meg reportedly spent $144 million of
her own money on a failed run for governor of California. She
quickly rebound and was added to the board of
During her tenure of about a year and a half, the stock started out
looking like it was the right move. After the February 16 2012,
high of $29.89, the stock plunged to a November 21 low of $11.94, a
drop of 60%. But that low point was the time to buy as the stock
has since rebounded 68.7% to $20.15.
Fifth CEO in Three Years
) has had a difficult past few years. Co-Founder Jerry Yang was
replaced by Carol Bartz, who was replaced by Tim Morse, who was
replaced by Scott Thompson, who was replaced Ross Levinson. The
merry go round came to a halt on July 16, 2012 when Marissa Mayer
was named CEO.
Investors have really given a full vote of confidence. The stock is
up roughly 40% since the Wausau, Wisconsin native took charge of
the chronically troubled internet company.
Mayer has several hurdles in front of her, such as loss of search
share and a poorly performing agreement with Microsoft. One
positive she has going for her is that the road to monetization of
the Alibaba asset has been mostly cleared. As long as the M&A
team doesn't work from home, they should be ok.
Groupon lost its only CEO, and is now in a state of flux. Co-
Founder and board chairman Eric Lefkosfsky is sharing CEO duties
with Ted Leonsis, in a move that resembles the Citigroup shift.
Will these two stay on in this role or will they look for someone
else? No matter what happens next, we will be watching and in the
end, we will root for everyone to succeed. I will especially root
for Mr. Mason in his effort to restore his health and move forward.
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