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THE HEADLINES
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PAPER JAM
After months of court battles, and a full-on coup with Board seats on the line, Xerox is backing out of their merger deal with Fujifilm, and (finally) getting rid of CEO Jeff Jacobson.
It has been a crazy Year of the Dog so far for Xerox. The company announced the merger in January, and it was immediately opposed by activist investors Carl Icahn and Darwin Deason. The two started a proxy battle in an attempt to nullify the merger and oust Jacobson. While Xerox’s Board initially complied, they abruptly reversed their decision and kept Jacboson in charge.
Icahn’s argument was that the sale devalued Xerox and Jacobson was only seeing it through for his own benefit.
Power began shifting in Icahn’s favor and it appears that Fuji didn’t exactly help themselves. The company promised audited financial statements before April 15, and they did not deliver. When the statements did become available there were some large discrepancies.
Who knew the printer business could be so exciting?!
Water Cooler Talking Point: “Activist investors have to be more hated than Jon Taffer OR ‘the Bobs.’ They buy shares to get a board seat and then tell everyone how terribly they are running the company.”
REVOLVING DOORS
It’s been a whirlwind weekend for C-suites across the US as Uber, Gamestop, and Tesla all face leadership turnover.
For Uber, a recent hiccup in their search for a new CFO is adding to a laundry list of trouble that they face as they head towards a potential IPO in 2019. VMWare CFO, Zane Rowe, was the favorite for the job but backed out last week, much to the chagrin of CEO Dara Khosrowshahi.
Gamestop, the retailer best known for paying three cents on the dollar for video game trade-ins, found a new CEO just three months ago. But it appears that Gamestop will be scanning LinkedIn for a new leader as Michael Mauler is already planning to step down. I’m sure the firing of two other executives (including the COO) within days of Mauler’s hiring didn’t have anything to do with his decision.
Of the three executive changes, Tesla’s seems the be the least permanent. Doug Field, SVP of Engineering at Tesla, is taking a “leave of absence.” Under normal circumstances, a few-week sabbatical for a tech exec would be par for the course, but Elon’s brainchild is currently struggling mightily to get Model 3’s out the door.
Water Cooler Talking Point: “Being able to fall way behind at your job and then just take seven weeks off when sh*t hits the fan seems like a pretty sweet job perk. You can keep your ‘unlimited’ sick days.”
CHIEF EXECUTION OFFICER
Never f*ck with a dude named Jes. Barclay’s CEO, Jes Staley, was hit with a $1.5M fine (roughly 1/4 of his 2016 salary) for trying to unmask a whistleblower in 2016.
Staley got his SVU on trying to uncover the identity of “John Q. Public,” an anonymous whistleblower who raised concerns to the board about one of Staley’s former JPMorgan colleagues that he had hired at Barclays.
Mr. Staley resorted to street justice, pressuring compliance and security to give up the perps name. Apparently he “just wanted to talk to them.” Jes never uncovered Mr. Public’s identity.
Water Cooler Talking Point: “Hasn’t Mr. Staley learned anything from HBO’s Silicon Valley? If you’re Gavin Belson, get yourself a Hoover to clean up all of your messes.”
IN OTHER NEWS
- President Trump announced the American Patients First proposal which vows to reduce pharmaceutical costs. How does Donny Politics plan to do this? Capitalism of course. The administration vows to increase competition and reduce regulatory burdens. Pharma and PBM shares jumped on the news.
- Bathrooms aren’t just “for customers only“ at Starbucks anymore. The announcement comes as the preferred workspace of aspiring novelists faces backlash associated with baristas asking two black men to leave a store.
- The market isn’t taking kindly to Symantec throwing around words like “whistleblower” and “audit committee concerns.” Shares of the security software firm were down 30% on Friday.
- Didi Chuxing, the “Uber of China” suspends its “Hitch” service in China after a female passenger was murdered last week. A Lifetime movie is reportedly already in the works.
- Jack Ma’s Ant Financial will close a $10B funding round in the next few days. The round will value the company at $150B.
- US indices were mixed Friday:
- DOW: +0.37%
- S&P 500: +0.17%
- NASDAQ: -0.03%