4. FBN's Fall
What makes Sammy run?
Furniture Brands International
CEO Ralph Scozzafava.
Shares of the beleaguered furniture maker fell over 5% last Friday and another 10% Monday to a reverse split adjusted $3.39, after
filings revealed that controlling shareholders Shan Huei Kuo -- a.k.a. Samuel "Sammy" Kuo -- and his wife Yi-Mei Liu -- a.k.a. "Grace Liu" -- are selling 267,355 shares of Furniture Brands common stock from their Samson Holding company. The sale will take Samson's ownership in the company to less than 10%.
Prior to the settlement of the sale, Hong Kong-based Samson reportedly held 1,031,624 shares of Furniture Brands, representing 12.8% of the company. The filing also states that the pair is considering blowing out the remainder of its interest in the company.
Hey, could you blame them after what Scozzafava did to that classic American manufacturer? In barely five years he took it from Thomasville to Palookaville (thanks again Budd Schulberg).
FBN stock has fallen over 95% since Ralph took the CEO spot. The company has failed to turn a profit in the past six years, losing $47 million in 2012. The Street expects the cash-strapped company to lose $6.11 per share in 2013 -- if it makes it to the end of the year of course.
Scozzafava has profited handsomely despite the firm's collapse, never missing a chance to prop-up his bonus along the way. Just this past March, for example, FBN lowered the threshold for its executive bonus plan thereby boosting Ralph's pay to $1.98 million.
Sadly, the circumstances could have been much different for FBN.
Well-known to be a shrewd operator, Sammy acquired Craftmaster Furniture in 2006 and was seeking to expand his American operations when he made a hostile bid for FBN the following year. FBN, however, still viewed itself as an industry giant and rebuffed Sammy's overture. As a result, Sammy amassed a major position in the company, but remained merely a face in the crowd as Ralph ran the once iconic company into the ground.
Yep, from Schulberg to Sammy Kuo to Ralph Scozzafava, it's always the same.
The bigger they are, the harder they fall.