Sometimes the departure of a CEO can be devastating to a company. As with the resignations of Steve Jobs from Apple Inc. (AAPL) or Lulemon Athletica (LULU) CEO Christine Day, the CEO can be, in the eyes of investors, essential to the company’s success, and in the case of Lulumon their departure immediately sends the stock reeling.
But as with the resignation on Aug. 22 of Microsoft Corp. (MSFT) CEO Steve Ballmer, quite the opposite can be true as well. The announcement of his upcoming 2014 resignation caused an immediate 6.85 percent uptick in the price per share of the company.
Whether Ballmer was unfairly scapegoated for Microsoft’s failures or no, there’s no denying that even before investors know who the new boss will be, some CEOs like Ballmer are so despised that their very absence is viewed by investors a net positive.
Ballmer might be the latest, but he’s certainly not the first CEO investors were more than happy to see gone:
Hewlett-Packard Company (HPQ)
Hewlett Packard is a pioneer in tech, and was for a time a Fortune 20 company. When Carly Fiorina took over as CEO in 1999, HP was at the height of its power, and she became possibly the most powerful businesswoman in the country.
Fiorina fought constantly with the board and investors. She engineered the buyout of Compaq in the spring of 2002, after winning a highly damaging proxy fight with a Hewlett heir, albeit one that sullied her image greatly.
On Feb. 10, 2005, things finally came to a head, and Fiorina was finally pushed out by the board. When that news hit the the stock rose 6.9 percent. Investor reaction to her ouster was summed up by Fulcrum Global Partners analyst Robert Chira, who said “nobody liked Carly's leadership all that much… the market’s hope is that anyone will be better.”
Yahoo! Inc. (YHOO)
Yahoo is one of the longest-running dotcoms still on the market. The company has had several ups and downs, most notably during the tech bubble, which saw their stock go from over $110 to less than $9 a share in a year and half.
The company had been languishing for some time when co-founder Jerry Yang took over as CEO in 2007. Yang oversaw what was, at the time, a mistake that might have cost shareholders billions.
Microsoft made an unsolicited bid for Yahoo in 2008 for $44.6 billion, which the company rejected. The rejetcion was seen as arrogant, and critics have been largely proven correct, as the company is still only worth around 60 percent of Microsoft's offfer.
When Yang left the company in November 2008, the stock rose 8.65 percent. He was succeeded by Carol Bartz, who also failed to change the beleaguered tech company’s fortunes. When Bartz got fired three years later, the stock again rose 5.4 percent.
When it comes to CEOs, eighth time’s a charm for Yahoo. After interim tenures by Roy Bostock, Scott Thompson and Ross Levinson, the company appointed former Google exec Marissa Mayer to be their eighth leader. Her short tenure has already spurred some high profile successes for Yahoo, like the company topping the list of monthly web uniques for the first time in two years.
Groupon Inc. (GRPN)
The coupon-aggregating website has been one of the hottest properties to come out of tech in the last five years. The daily-deals website was simple and attractive, and the website was an immediate smash. However, while investors might have loved founder Andrew Mason’s 1.61 billion dollar idea, but they didn’t love the way he ran the company.
Herb Greenberg of CNBC called Mason the “worst CEO of the Year,” citing the company’s disastrous IPO and Mason’s childish antics and failure to grasp basic business fundamentals. Mason had said at Groupon's IPO that they didn't judge themselves by traditional metrics, which greatly worried investors.
Following a very disappointing earnings report in the first quarter of 2013, Mason was ousted by the board. Shares shot up 12.6 percent that day.
Zynga Inc (ZNGA)
In 2011, the online video game maker Zynga seemed to have the market figured out. Their games Farmville and Words With Friends were some of the most popular in the country, and the game maker seemed poised for continued success with several promising products in the pipeline.
The company went public on Dec. 16, 2011 with CEO Mark Pincus ringing that day’s opening bell. Then things started to almosy immediately go sour. The IPO tanked. Zynga laid off 18 percent of their workforce as they failed to produce a hit. Searching desperately for a big moneymaker, Zynga bought the makers of the fad game “Draw Something” for $183 million at what turned out to be the waning of its popularity. Zynga took over an $85 million write down on the mistake.
Following the "Draw Something" fiasco, the company attempted to break into online gambling, and fiuled for a Nevada gaming license. The foray into gambling was eventually aborted.
Zynga has stil failed to produce a big social media gaming hit on par with King.com’s Candy Crush, as their older games continue to dwindle in popularity.
In July 2013 Pincus, who owns a sizable chunk of the company, fired himself. On the news he would be gone, Zynga's stock spiked over 11 percent.
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