Sometimes the market can sum things up quite succinctly. Want to know its opinion on Diebold's (NYSE: DBD ) former leader Walden W. O'Dell? Well, the stock is up almost 6% on the news that the developer of ATMs, security products, and election systems canned O'Dell as CEO and replaced him by promoting the president and chief operating officer.
Loyal Fool readers may recall some of my prior hammerings of this company. Under O'Dell, this company was a model of earnings misses, so-called "one time" charges, and a host of "it's not our fault" excuses. In other words, it was a perfect example of what not to be.
And let's not forget a little controversy around the 2004 election, when the ex-CEO pledged to "help Ohio deliver its electoral votes to the President next year." Not exactly what you want to hear from the CEO of a company that makes touch-screen voting machines.
Is it fair to lay that all on one man? Of course not. But when you sit in the big chair, you have to be ready to take the blame as well as the credit. While I'm sure you can point to successes in O'Dell's tenure at the top, including a doubling of the stock price, I would like to think that the board realized that there was a point where excuses had to give way to performance.
In some respects, incoming CEO Thomas Swidarski is sitting pretty. Many investors will be happy simply to see a new guy in charge, and he's likely to get the benefit of the doubt for at least a few quarters. What's more, a fresh voice and strategic vision could be just what the doctor ordered here.
But that's only part of the story. The other good news here is that this is actually a company with some very real potential. Despite the screwups, flubs, and gaffes, Diebold is a good business with some righteous cash flow. Even if it merely avoids deepening the mess it's in, this could be the beginning of an interesting turnaround story.
For more on the follies of Diebold:
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).