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Andrew Mason was recently fired as CEO of Groupon
(GRPN - Snapshot Report). 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
(C - Analyst Report) 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
(BBY - Analyst Report) is down around
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 Hewlett-Packard
(HPQ - Analyst Report).
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
(YHOO - Analyst Report) 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
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
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