This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
Sometimes Wall Street acts dumb. Other times, it just outsmarts itself.
Take the recent action in
VeriSign(VRSN - Get Report) for example.
Shares of the Internet infrastructure provider fell over 14% last Friday after Brian Robins resigned as chief financial officer. VeriSign said in a statement that Robins is leaving "to pursue new opportunities" with his last day being Sept. 30.
Now if you owned VeriSign stock that morning, you must have been wondering why the selloff was so steep. Executives come and go all the time. And it's not like this guy is getting canned for a sex scandal or stealing office supplies. He's just moving on, right?
Furthermore, Chairman Jim Bidzos, also the company's founder, even blessed Robins' departure by saying he appreciated Robins' contributions and his role in "positioning the company to take advantage of new opportunities." Bidzos, for those who may have missed it, has been filling the chief executive officer role since Mark McLaughlin left last month to take the top job at Palo Alto Networks.
Alright, let's get this straight. A relatively unknown number cruncher is leaving the company with a pat on the back from the boss and not even going to a competitor ... and the stock gets crippled? What's going on here?
Allow us to explain, because it really is a great illustration of how the geniuses on Wall Street occasionally fall behind when they try to think ahead.
You see, VeriSign did not really 'lose' market value on Friday, as much as it gave up gains it never deserved in the first place. The stock had jumped 13% in the days prior to Robins' announcement after the company canceled appearances at two conferences, fueling rumors that VeriSign was going to be acquired.
In other words, the stock ran up because the guy didn't show up. Then it sold off when it was announced that he was gone for good, leaving shareholders essentially back where they started.
Don't try to make sense of it though. You may hurt your brain doing so.