Filed under: Management, Rants and raves, Competitive strategy, Microsoft (MSFT), Yahoo! (YHOO), Dell (DELL), Starbucks (SBUX), McDonald’s (MCD), MBIA Inc (MBI)
When things are not going as planned and you start to reminisce about the good ‘ole days, what superior tactic than to bring back the old CEO for a second tour of duty.
When Yahoo! (NASDAQ: YHOO) dumped Terry Semel, founder Jerry Yang took over the top spot again only to languish in the same murky waters with a lackluster stock. Yahoo’s biggest news since Yang assumed the wheel was Microsoft (NASDAQ: MSFT)’s recently rejected offer of $31 per share for a stock that shut yesterday at $28.83.
It is of interest to me that in such high stakes M&A bartering, Yahoo thinks the offer is too low — based on what, it did not say — but if the deal does not happen, the stock may not be worth the current price. Go figure. Plenty of people that invested in Yahoo, like Legg Mason (NYSE: LM), agree with Yang.
Starbucks (NASDAQ: SBUX) stock, which collapsed over the the past 18 months, has not been a pretty sight as it traded down from a high of $40 to yesterday’s close of $18.26, near its 52-week low of $17.66. Other coffee home chains have sprung up over the years and now McDonald’s (NYSE: MCD) is moving into its turf, full steam (of coffee) ahead, announcing plans to roll out coffee bars with similar-tasting beverages, served by baristas, at lower prices, to its 14,000 U.S. stores in 2008.
Howard Schultz was restored to his CEO post by the board last year in an effort to get the company back on track. Given that he was the principal architect of all of the company’s major concepts and growth, there’s renewed hope. The jury is still out on his chances of success to bring the company roaring back. It is more likely, given the current landscape, that the stock will come back, albeit fighting and scrapping.
Michael Dell, the wunderkind that built Dell (NASDAQ: DELL) into a tech powerhouse, took back the reigns of his stalled-out company after his hand-picked longtime partner failed to spark Dell in the marketplace. Despite Dell’s optimistic view that he could turn things around, he has not, and the stock has dribbled down to a six-year low. Furthermore, there does not seem to be much on the horizon that’s very inspiring; quite the contrary. Hewlett-Packard soars while Dell flounders.
And now, this week, Jay Brown has returned to MBIA, resuming prior positions as chairman and CEO, allowing battered and bruised Gary Dunton, MBIA (NYSE: MBI)’s CEO so far, to step down. This may be a case where it was not so much the company’s dire need to bring back a stronger leader, but one where Mr. Dunton just had enough. After all, much of the poor quality, subprime loan mess was created during Brown’s watch, but left to Dunton to explain. Now it appears after Dunton has taken most of the heat and reset the company’s course somewhat, Mr. Brown may get all the glory. This will come much later though. MBIA still has a torrid journey ahead of it.
All of these CEOs have there work cut out for them. They may not see any improvement soon. It might be deep into the administration of a new CEO in the White Home before things get better.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of MBI and SBUX.
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