3 Stocks That Would Rally if Their CEOs Were Fired: Microsoft Corporation (MSFT), Cisco Systems, Inc. (CSCO)

Page 1 of 2

Shares of a company frequently rally after the CEO is fired. For example, shares of Groupon Inc (NASDAQ:GRPN) surged Thursday after Andrew Mason was let go, and shares of Chesapeake Energy Corporation (NYSE:CHK) traded higher after Aubrey McClendon’s resignation was announced in January.

In the same vein, it is likely that shares of Microsoft Corporation (NASDAQ:MSFT), J.C. Penney Company, Inc. (NYSE:JCP) and Cisco Systems, Inc. (NASDAQ:CSCO) would rally if their CEOs were sent packing.

Microsoft Corporation (NASDAQ:MSFT)Microsoft’s Steve Ballmer has presided over a decade of stagnation
Hedge fund manager David Einhorn called for Ballmer’s resignation in 2011. At the Iran Sohn investment conference, Einhorn derided Ballmer for failing to take advantage of the shift to mobile computing while, at the same time, blowing billions on ill-fated acquisitions and pie-in-the-sky projects.

It’s hard to argue with Einhorn’s assessment. Ballmer became Microsoft Corporation (NASDAQ:MSFT)’s CEO in 2000. In the 13 years since, both the business and the share price have stagnated.

Microsoft missed the mobile computing revolution, losing out to rivals Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG). Its attempt to catch up — Windows 8 and the Surface tablet — has thus far failed to have a meaningful effect on the market.

Microsoft’s search engine Bing, which Einhorn characterized as a “sinkhole,” remains a distant second to Google (about 15% of the market to Google’s 66%). Ballmer hasn’t been shy about making acquisitions, but they mostly haven’t panned out. The company posted a loss last year after taking a $6.3 billion write-down on aQuantive — a company it had acquired just five years prior.

Ballmer’s failings have been enough to create speculation that Gates would consider coming out of retirement. Just last October, Gates had to insist that he remained devoted to philanthropy.

If Ballmer was fired, shares of Microsoft would surge on the hope that new blood could reinvigorate the company. Whether or not that would ultimately happen is another matter, but as long as Ballmer remains CEO, investors will continue to view Microsoft for what it is: a tech utility.

Ron Johnson’s turnaround strategy at J.C. Penney could bankrupt the retailer
Ron Johnson was brought in from Apple in 2011 to turn J.C. Penney around. At the time, J.C. Penney was an old budget clothing retailer, coasting along with a core customer base of lower-middle income consumers.

Johnson wanted to change all that. He had built arguably the most successful retail operation ever at Apple, and at the time he was hired, it was believed that he could work his magic on J.C. Penney.

To put it mildly, he has failed. Shares of J.C. Penney plunged as much as 20% on Thursday after the company reported what was arguably the worst quarter for a retailer ever. Same-store sales fell over 31%, suggesting that the company’s shifting strategy has driven away its core customers. For the entire year of 2012, the company lost nearly $1 billion.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Biggest Airports in the World

The 5 Most Gang Infested Cities In America

The 34 Smartest Countries in the World

The 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!