Ruby Tuesday’s CFO Is Retiring and Here's Why You Shouldn't Worry

The market brushes off Ruby Tuesday’s CFO departure.

Jul 11, 2014 at 10:19AM

Images
Source:  Wikimedia Commons.

When I first saw the headline announcing a new CFO of Ruby Tuesday (NYSE:RT) "effective immediately," alarm bells rang in my head.  My first reaction was to think, "Here we go again!"  Ruby Tuesday over the last year has seen a handful of top executives leave under mysterious and never-explained circumstances.  However, despite me being very critical of Ruby Tuesday in the past I actually don't believe this event is a cause for new concern.

Stark contrast to other departures
First there was Matthew A. Drapkin, Chairman of the Board, quit without notice. There was no press release announcing his departure. There were no words thanking him for his service or giving an explanation. In fact, not only was there no explanation, but Drapkin also almost immediately sold his 1.4 million shares of company stock in the open market. He didn't seem like a happy camper, and it the whole thing is just a red flag. 

Second and two days after Drapkin ran out the door, Robert LeBoeuf, then Senior VP of Ruby Tuesday, jumped off the ship. Just as with Drapkin, there was no explanation or reassurance. Both resignations came shortly after the company reported results for the prior quarter, and likewise the actual quarter when the resignations took place turned out to be bad as well.

But this time really is different
Third, on June 26, Ruby Tuesday announced the retirement of CFO Michael Moore. Jill Golder was named as his replacement, effective immediately. That's the third executive to quit.  Red flag city whether the company calls it a "retirement" or not, right?  Well, the word "immediately" in reference to his retiring kind of throws you off and looks scary.

What's different here is Moore will remain on as an advisor through August to help with the transition unlike the other two who quit more abruptly. In the SEC filing that accompanied the press release, it stated that Moore will also retain the title of Executive Vice President in the interim. 

Buettgen had nothing but kind words for Moore in the release: "We would also like to thank Michael for his many contributions to Ruby Tuesday during his tenure, wish he and his family all the best in retirement, and thank him for supporting us during this transition."

This suggests it is may be simply a sincere retirement rather than a third sign of a problem.  Humans tend to be creatures of habit and the same can be said about companies in their public communications.  The retirement of Moore was handled in a much different way than the exodus of the previous two executives.

 

Ruby

Source: Wikimedia Commons.

Foolish takeaway
My point is simple.  When executives quit (or are fired?), the departure details tend to be a secret and the executive in question doesn't hang around. In the case of CFO Michael Moore, the entire publicity behind his departure was handled in a completely different manner. So while I'm no fan of Ruby Tuesday and won't be until I see more real evidence of a solid turnaround, I see no reason to add additional concerns in light of the Moore's retirement. No new red flags come up.
 

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Nickey Friedman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers