The Five Dumbest Things on Wall Street This Week
Skates off into Sun set
1. Icing on the CakeSun Microsystems' (SUNW) shining moment this week was short-lived.
Fans of the Santa Clara, Calif., server maker applauded late Monday when co-founder Scott McNealy announced his long-awaited decision to step aside as CEO.
"I think Jonathan is the right person to ride Sun forward on this next big wave," McNealy said of successor Jonathan Schwartz, a ponytailed longtime Sun executive. "The timing fit me to a T and it was my call," added McNealy.
The decision also fit Wall Street to a T. Sun rose to prominence during the 1990s boom, but has lost money by the bucketful since the tech bubble burst. Analysts have prodded the company to cut jobs by the thousands, a move McNealy has opposed.
But if Sun backers were counting on a decisive break with the McNealy era, Schwartz has other plans. "Realistically, we have been lockstep on a whole number of different issues, across the past four or five years especially," Schwartz said of McNealy on a conference call Monday.
That march is already proving painful for some investors. On Monday's call, Schwartz quickly brushed off one analyst's published projection that the company could cut 12,500 jobs. After spiking as high as 7% on Monday's CEO-change announcement, Sun shares gave back their gains Tuesday to close flat.
"What is going to differ between the two of us?" Schwartz said in response to one question Monday. "Scott plays hockey. I don't play hockey. Scott has a short haircut. And unless he pulls something out that mandates it as a part of my employment contract, I'm keeping my haircut."
We have a feeling, Sun, that's not the kind of haircut investors were worrying about.Dumb-o-Meter score: 93. Just four days before he gave up the CEO post, McNealy dismissed a Wall Street Journal report that his resignation was imminent. "That rumor is about 22 years old and still chuggin," he wrote. To view Colin Barr's video take on Sun's entry in Five Dumbest this week, click here.
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