Watch your heads, CEOs
January is always a dangerous time for corporate chieftains who failed to deliver the year before. Boardrooms will often try to quietly push a resignation notice to a CEO before shareowners bring battering rams to annual meetings.
So let's just say that I'm not surprised to see so many prolific companies give their CEOs the heave-ho this past week. Starbucks' (Nasdaq: SBUX) ouster isn't a shocker. The java giant's stock fell a whopping 42% last year. The convenient retirement at the top of Force Protection (Nasdaq: FRPT)? The stock had been a roller coaster, with the past few months being the free-falling part at the other end of the chain lift. Bear Stearns (NYSE: BSC) taking a little off the top? I'm yawning here.
In some respects, companies aren't too different from the NFL, which canned a handful of coaches this month after losing seasons. Shareholder meetings are like pep rallies, only with uglier cheerleaders.
Investors get bloodthirsty when they see red in their brokerage statements. They want change. They often get it, though one shouldn't be surprised if the replacements wind up doing an even worse job than the CEOs they're filling in for.
The lopped heads aren't done rolling. Shield your eyes -- or at the very least, watch where you step.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- The Consumer Electronics Show always brings a wave of tech announcements and breakthrough gadgetry, but TASER's (Nasdaq: TASR) latest seems hard to top. The company rolled out a leopard-print stun gun, complete with a holster that can hold up to a gigabyte of tunes. Yes, you, too, can replay one of the many "Don't Tase Me Bro" remixes that are floating around YouTube as you set your TASER to stun.
- To HD-DVD or not to HD-DVD? That is the question. The answer, apparently, is "not." Time Warner (NYSE: TWX) is ditching the platform, throwing its support exclusively behind the Blu-ray high-def standard, and rumors swirl that HD-DVD holdouts Viacom's (NYSE: VIA) Paramount and GE's NBC Universal may soon follow suit. The war isn't over, but don't go rushing to buy an HD-DVD player just yet (unless, of course, you're a buyer for The Smithsonian).
- Finally, XM (Nasdaq: XMSR) is paying Starbucks $22 million in stock for the early termination of a cross-promotional contract that was supposed to expire in 2009. Have things gotten that bad for Starbucks, that even a deficit-riddled satellite radio provider would rather buy its way out of a promotional contract with the java junkie? Then again, seeing how well Starbucks did in promoting Akeelah and the Bee, I can't say that I blame XM.
Until next week, I remain,
Rick Munarriz
