My favorite CEO adage by far is the tale of three envelopes. It is rumored that a new chief executive is presented with three envelopes by his predecessor. These notes of wisdom are designed to be opened in sequence in response to any serious crisis. The first letter directs the new leader to shift blame to the last CEO. The second envelope directs the CEO to re-organize and fire people. The last and final piece of advice on the third letter is to prepare three identical envelopes for the next guy. This urban legend may elicit a few snickers from the readers, but unfortunately for HP CEO Meg Whitman, it looks like she’s already cracked open two of her three envelopes.
It seemed like Netflix had it all not all that long ago. A thriving DVD-by-mail rental business, a streaming service that grew more popular than movie studios anticipated, and for the most part, happy subscribers. All that was before Netflix shot itself in the foot with a laser guided cannon, and it's been hopping awkwardly ever since. Watching Netflix stumble around isn't the kind of thing that leads to investor confidence, nor is warning that the worst might be yet to come.
Dropbox has come under fire recently over a series of security snafu’s, but even with all the negative press, it remains a utility with no equal for users who are trying to get work done on multiple machines and devices. Given how ubiquitous the service has become since it launched back in 2007, we expected they would have no trouble locking down additional funding from investors, and we were right.
Steve Ballmer might look like Joe Everyman on the outside, but under that sweat stained exterior is a billionaire in disguise, and according to Reuters he’s cashing out. The CEO has apparently confirmed reports that he has sold 49.3 million shares of Microsoft stock worth an estimated $1.3 billion, a move that some feel might be motivated by the end of Bush-era tax cuts on capital gains.
According to Ballmer investors shouldn’t read too heavily into the decision to sell off shares, and it was done purely for personal financial reasons. At current prices Ballmer is sitting on about $10 billion in company stock, so despite the poor optics of a CEO selling off a large pool of shares, we suspect the temptation of all that non-liquid cash simply became too much. When you consider that his 2009 bonus was a mere $670,000 as a result of poor performance in the mobile and tablet market, it would make sense that he would want to supplement his income somehow.
Despite the sale Ballmer will remain one of the top shareholders in the company with a 4 percent stake, second only to Bill Gates who holds 7 percent. I guess with Windows Phone 7 and Kinect now on the market Ballmer just needed a bit of extra pocket change before he heads over to his local Best Buy.
Micheal Dell, founder and current chief executive of Dell, could use a hug right about now. Why? It was revealed during a regulatory filing on Tuesday that a fourth of investors -- or about 378 million out of 1.5 billion -- voted against Mr. Dell staying on his company's board, The New York Times reports.
"Mr. Dell is quite an iconic figure at the company," said Joseph A. Grundfest, a Standford law professor and co-director of the Arthur and Toni Rembe Rock Center for Corporate Governance. "It is extremely rare to have that amount of shareholder disaffection directed toward an executive who is so central to the company's past, present, and future."
Dell shareholders are apparently fed up with the company's recent woes, including the payment of $100 million to settle charges of accounting fraud brought forth by the Securities and Exchange Commission (SEC). According to the SEC, Dell misled its investors by not disclosing how important regular payments from Intel had been to the company's bottom line.
Naturally, a Dell spokesman put a positive spin on the vote, saying, "Our board of directors has previously reaffirmed its confidence in Mr. Dell's leadership and a majority of shareholders agreed."
Private equity firm Apax Partners will spend $580 million on a 70 percent stake in Sophos, the security vendor announced on Tuesday. The hefty investment values the UK--based security company at $830 million.
Sophos focuses almost entirely on providing antivirus protection to businesses of all sizes, and according to Graham Cluley, the security vendor's senior technology consultant, not much will change as a result of the buyout.
"There won't be any job losses or any changes inside," Cluley said. "There will be the same management team."
Sophos had toyed with the idea of making an initial public offering (IPO) in 2007, but decided against doing so when the economy all but tanked. According to Cluley, Apax approached the company earlier this year with a more attractive offer than that of an IPO.