The Five Dumbest Things on Wall Street This Week
Sternlicht disgusted by hotels' unloading
3. Fallen StarFormer Starwood (HOT) chief Barry Sternlicht has some stern words for his successor.
Starwood, the lodging giant that Sternlicht built over 10 years before his departure this spring, said Monday it would sell 38 upscale hotels to rival Host Marriott (HMT). Top managers at Starwood and Host Marriott were predictably worked up. "We are thrilled to announce this acquisition," Host's Chris Nassetta said.
"This transaction puts a strategic stake in the ground," said Starwood's Steve Heyer, explaining his desire to shift Starwood's focus toward marketing.
Heyer, of course, is the former Coca-Cola (KO) second-in-command who fled the sugar-water giant after he was passed over for CEO in favor of Neville Isdell. When Heyer joined Starwood last year, Sternlicht -- a notoriously hard-to-please boss who remains the company's largest shareholder -- was anything but stingy in his praise.
"Steve embodies all that we were searching for in a new CEO," said Sternlicht in a Sept. 20, 2004, press statement. "I believe this will be a momentous day in the company's short history as we bring in an executive of Steve's caliber from outside the industry to look at Starwood, explore new avenues for growth globally and approach our core hotel business with a fresh set of eyes."
Judging by this week's events, though, Sternlicht is tired of fresh eyes."This is a very black day for Starwood shareholders and its board," Sternlicht told The Wall Street Journal. "I am 100% certain that private-equity interests would have paid more for these assets," he added, calling the deal "amateur hour." Just another momentous day at Starwood. Dumb-o-Meter score: 85. It sounds like the the Sternlicht-Heyer partnership may have lost its fizz.
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