When The CFO Quits... - Real Time Insight

By
A A A

An article last night put Andrew Mason on the hot seat.  The CEO of Groupon (GRPN) is supposedly in danger of losing his job, but most of those fears were alleviated today at a conference where he said "If I ever felt that I wasn't the right person to do the job, I'd fire myself."

When the CEO is leaving it's a big deal.  To me, when the CFO leaves, it's a bigger deal.

I have come to live by an old saying "When the CFO leaves, sell the stock" and that has proven invaluable to me over the years. 

Why do I think that it's more important when the CFO leaves?  Well the CFO is much closer to the numbers, the real metrics of how the company is making money.  More importantly, they see how the company is not making money and when they see a big problem on the horizon, they sometimes don't want to stick around to see what happens.

Take the recent example of Guess (GES).  On November 1, the CFO announces he quits, the stock sinks 7% in after hours.  The stock had closed at $25.89 and then opened at 23.20 the next day. From November 1 through November 15, the stock was down 7.67%.

There are numerous other examples of the CFO leaving and the stock dropping significantly in the near term.

Do you agree with me that the CFO leaving is more important than the CEO?

Let me know what you think and share an example if you wish!



To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: GES , GRPN

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

My Career No Longer Exists
My Career No Longer Exists          

Stocks

Referenced

Most Active by Volume

105,767,201
  • $46.30 ▲ 19.98%
80,574,036
  • $15.58 ▲ 1.56%
66,424,299
  • $3.46 ▲ 1.76%
42,459,394
  • $3.82 ▲ 0.79%
36,704,800
  • $13.98 ▼ 14.02%
35,625,113
  • $74.677 ▲ 1.31%
33,067,430
  • $29.26 ▼ 0.71%
32,374,580
  • $98.15 ▼ 0.23%
As of 7/30/2014, 04:04 PM