The CEO who made $15 Billion disappear
And Other CEO Magicians
Some CEO’s are true American heroes. Individuals such as Henry Ford, Robert Wood (Sears), Tom Watson, (IBM), and Steve Jobs (Apple) all created hugely successful and popular Iconic companies that satisfied many needs and wants of the American (and World) consumer. We should celebrate them all, for their success, their philanthropy, and their products and services (no matter what Obama and Sanders think of them).
Then there are the bozos of American Industry, guys and gals who drove fine companies into the ground or wasted billions of shareholder assets on idiotic acquisitions or other failed strategies. Let’s remember a few of these nimrods, who were able to make nothing from billions. Alan McCollough, who led Circuit City from leadership in consumer electronics to near bankruptcy in just eight years. Carly Fiorina, who wasted $25 billion buying Compaq, when PC manufacturing was becoming a low margin commodity. Juergen Schrempp, CEO of Mercedes who squandered $37 billion buying perennial loser Chrysler. And who can forget Gerald Levin, who spent $164 billion on AOL? The only thing left of that benighted enterprise is a few of those damned free discs still lying around in everyone’s desk drawers. These pinheads deserve any amount of contempt we may heap upon them, given the market value lost in our mutual funds when their stock prices tumbled as a result.
You might actually become a Bernie Sanders supporter, knowing all of these value destroying putzes walked off with major fortunes despite their obvious deleterious impact to their shareholders and employees.
The latest we should all heap scorn on, however, is Steve Ballmer (who is not from Baltimore, despite his name sounding exactly how natives of that riot scarred, crab eating town pronounce the name of their fair city.)
I read in Sunday’s paper that the final write down that Microsoft took on its purchase of the one time cell phone leader Nokia was $9 billion. Now, that does not sound like much compared to the monumental fiscal carnage we can credit to our fine political leaders . The sad sack citizens of California, for example, are on course to waste $64 billion constructing a bullet train that you can bet no one will want to ride. You can fly on a plane at 600 miles an hour, for example, often for $100 round trip on Southwest. What do we need a mode of transportation that is one third the speed for? And for short trips, the car is faster and you don’t have to buy a ticket or smell the b.o. of your seat mate. The Obama Administration is setting new records for fiscal malpractice of course, but that is the subject for another day.
Anyway, back to Ballmer. He hung around Microsoft for over twenty years, possibly helping build the company along the way. But, does that excuse the two moronic acquisitions that he insisted they make, which collectively lost $15 billion? His board fought him over the Nokia deal, in the end wimping out and gutlessly caving in to a doomed strategy they didn’t believe in one bit. (Barnum’s law, corporate governance chapter: Never underestimate the cowardice of a highly paid B of D, is the moral of that story). Our friend, the great Ballmerdini, quit in a huff when the Board dared to question his transcendent wisdom. BTW, the new CEO at Microsoft wrote down the Nokia acquisition IN ITS ENTIRETY less than a year after the transaction was completed. It takes a special kind of judgement, (by this I don’t mean GOOD judgement) to buy a company so monumentally flawed that its actual value is $9 billion less than you paid for it less than a year before. Calling Dr. Moe, calling Dr. Schemp, calling Dr. Curley, calling Steve Ballmer!!!
While he didn’t get any big severance package, his net worth is estimated at $22 billion due to the stock value he accrued at Bill Gate’s company. He demonstrated his general business acumen by going out and buying the L.A. Clippers, at various times rated the worst franchise in professional sports history. Rumor has it that he is looking into buying the San Diego Padres, Cleveland Browns, and the WNBA also. (That’s not true, I made it all up. But I would not put it past him). Do you think the shareholders at Microsoft are feeling good about his wealth, relative to the amount of their dough he burned through? Can you get a refund on unearned stock options?
Anyway, here’s to the great Ballmerdini, the magician able to make $15 billion magically disappear. Hats off to the many other CEO numbskulls counting their dividends in tony Florida resort homes, while their pensioner shareholders contemplate the non-existent growth in the value of their retirement funds. Kinda makes you want to call him up and cuss him out, doesn’t it?. You can use your cellphone, (probably an iphone or droid; likely not a Nokia product).