2. Heidrick's Struggles
If you were like us, you would think that executive search firm
Heidrick & Struggles
(HSII - Get Report)
would be pretty solid in the CEO department and its leadership would have its act together regarding the company's strategic vision.
Then again, if you were like us you would be completely and totally wrong.
Heidrick's stock took a header Tuesday, sinking over 17% after the company announced it would not be selling itself and that its CEO Kevin Kelly was stepping down after seven years in the top spot. Kelly will also resign from the company's board of directors in order to return full-time to Heidrick's executive search practice in a senior client-service role. Heidrick said that Jory Marino, head of its U.S., Canadian and Latin American operations, will serve as interim CEO while the company hunts for candidates to fill Kelly's position.
There is, of course, the possibility that Marino looks around and then decides to simply assume Kelly's old job. We're not counting that out. And we also doubt Kelly, a 17-year veteran, will stay on too much longer. Seriously, other than Pope Benedict XVI, can you name another chief executive that hung around the building after relinquishing his reign?
To be perfectly honest, it's a struggle figuring out what's happening at Heidrick. Clearly the Street is not enamored with the uncertainty either, especially the company's decision to go it alone after getting everybody's hopes up in June about a sale. Heidrick should know by now that if you to tell the Street you are "reviewing your strategic alternatives," you better damn well offload yourself. Anything short smacks of internal problems or executive strife, which is exactly what the Street -- rightly or wrongly -- is seeing here.
The only thing we do know is that the company that prides itself on finding leaders for others is not offering the market a lot of leadership right now.
Heidrick did try to offer some positive information to offset the unwelcome news that it is taking itself off the market. The company said it expects 2013 second-quarter net revenue to be at the high end of its previous forecast range of $110 million to $120 million when it reports later this month. Analysts are penciling in $114.6 million.
Unfortunately, the Street saw this feeble attempt to provide earnings guidance as pure spin from a company spinning out of control from the top down.