There must be some truth gas they pipe into the Oprah studio that gets people to come clean. After Lance Armstrong finally admitted he had used performance enhancing drugs it crossed my mind there's several CEO's I'd like Oprah to grill. Their stocks could certainly use some performance enhancement, too. Maybe they could get some from Lance in the green room.
Every Dog Has His Day on Oprah
First, a company that has a dog for a logo, Zynga Inc (NASDAQ:ZNGA) , the online gaming company. Wouldn't you love Oprah to ask CEO Marc Pincus, "What were you thinking?!" I'm not the only who thinks he should be on the hot seat. Dartmouth's Tuck School of Business professor Sydney Finkelstein agrees and listed Pincus among the worst CEOs of 2012. CNBC's Herb Greenberg and Motley Fool have also named him to worst CEOs lists.
It's not just the parasitic relationship with Facebook that turned sour, paying $180 million for a game company that only had one successful game, Words With Friends, but the worst was the vote of no confidence in his own company when he sold 16 million shares around lockup expiration. No wonder so many of their executives and best game designers are fleeing.
Another name is Aubrey McClendon of Chesapeake Energy Corporation (NYSE:CHK) , the natural gas and oil producer. Wouldn't it be great to see Oprah lean in close and say, "Aubrey, what were you thinking?" McClendon must have slept through the unit in college on conflict of interest as he ran a hedge fund on the side trading oil and gas. And that's not all; there was the corporate jet he treated like his own personal limo. Don't forget, five years ago when McClendon had to sell 94% of his Chesapeake shares to cover margin calls. Finally, the board slapped him on the wrist denying him his bonus for 2012 and removing him as President.
Then there's Ron Johnson, CEO of department store chain J.C. Penney Company, Inc. (NYSE:JCP) , who received $53.3 million in compensation while cutting the dividend. Johnson, who was a retail genius at Apple, inexplicably finds himself over his head at a department store. And it grieves me to say it because there's something of the underdog about JC Penney. The stores look better and brighter, but no one was shopping there on a recent weeknight. I would like to see Oprah get right up in his face, "Why can't you make money?!"
While Johnson isn't in the same league of greed and hubris as Pincus and McClendon, it seems that he is just not the right man for the job. Even Penney's long Bill Ackman with his 17.82% stake has suggested if Johnson can't right the ship in three years he wasn't the right leader. It's possible no one is, save competitor Macy's, Inc. (NYSE:M) CEO Terry Lundgren.
The Common Denominators
Not one of these is making money, the ultimate sin to shareholders. Zynga has -$0.89 diluted EPS, Chesapeake has -$1.20 diluted EPS, and JC Penney has -$2.39 diluted EPS. Each one has a debt burden, although Zynga's isn't as heavy a load as for the others. Chesapaeake has some $16 billion in debt to $142 million in cash.
Other things they share in common are big short interests with a 45.90% short interest in JC Penney. Yikes! Returns on equity are negative, profit margins are negative, and share prices have declined. All three have major competitors and no real moats.