5. Swisher Flushes CEO
Things continue to get messy over at
Shares of the sanitation products maker sank almost 19% to $1.68 Monday on news that CEO Steven Berrard is stepping aside so the company can clean up its accounting. Swisher named Thomas Byrne, an executive vice president, to serve as interim CEO, while Berrard will remain on the company's board. Berrard, if you remember, maintained back in March 2012 that Swisher's problem was a one-time, minor housekeeping event totaling less than $4 million.
"In order to facilitate completion of the 2011 audit process, and in order to better focus my energies on the strategic direction of Swisher Hygiene, I believe it is in the best interest of the company and its shareholders for me to step down as president and chief executive officer," said Berrard in a company statement.
Bye Bye Berrard, we here at the
hate to see you go. Swisher shareholders, on the other hand, may have a different opinion since they've seen nearly half their money disappear since the start of the year, primarily because of the company's inability to file a reliable quarterly financial report. And not just for the first half of this year, but all of 2011.
Come on guys. Why is it so hard to hand in your homework? Dog ate your 10Qs?
The company also admitted Monday that the
is giving it until Sept. 26 to become current on all its financial filings or else face delisting.
In other words, Swisher better clean up its act real quick, because it won't be able to sweep its problems under the rug much longer.
4. Zagg Hits Snag
The CEO of
apparently didn't wake up and smell the
Green Mountain Coffee
Zagg hit a snag Monday, tumbling 13% to $7.30, after the smartphone accessory maker's CEO and co-founder, Robert Pedersen, quit the company. Pedersen stepped down as a result of a massive margin call that forced him to unload 515,000 shares last week at an average price of $8.22.
Amazing. The guy brilliantly creates an entire industry out of covering
gadgets, but he's still not smart enough to cover his own ass and diversify his holdings. Figure that one out.
Perhaps Pedersen wasn't paying attention back in May when former Green Mountain Coffee founder and chairman Robert Stiller was forced out of the very company he founded for a similarly large margin call that sent his stock reeling. Hey, who knows, he could have been absent that day.
Or perhaps Pedersen simply never imagined it could happen to him. Maybe he was blindsided by the market's violently negative reaction on Aug. 3 after Zagg missed Wall Street's second-quarter earnings estimates by a penny. Despite a 60% year-over-year pop in sales, Zagg still lost a quarter of its value that day and it was that downdraft that most probably triggered the call that undid Pedersen.
Nevertheless, considering more than 27% of Zagg's shares are currently sold short, Wall Street clearly lacks confidence in Zagg's prospects. So if Pedersen did think Zagg could zig indefinitely higher, he might have been the only one.
3. Best Buy French Fried
shareholders are feeling anything but jolly - or
- these days.
The flailing electronics retailer named Hubert Joly, the former head of hospitality and travel company
, as its new CEO on Monday. Joly will take the reins from interim CEO Mike Mikan, who took the baton from former CEO Brian Dunn in April after Dunn was busted for engaging in an improper relationship with a female employee.
Note to the French national Joly: Don't follow Dunn's example when it comes to the old
joie de vivre
. Let's keep that in our pants, shall we?
That said, judging by the 10% selloff in the stock Monday, it's clear that Best Buy shareholders are feeling no love for Joly. As to how this background prepares him for selling stereos and flat panel TVs in strip malls, clearly shareholders have no idea and are voting with their feet.
For that matter, we don't get the choice either, but who knows, maybe Joly has a ton of
je ne sais quoi
hidden somewhere and we're just missing it. Or maybe Best Buy's board is betting he can turnaround Best Buy like he did EDS in France, now part of
, and Vivendi's video game business, now part of
Unfortunately, both of those reclamation projects took place in France over a decade ago before Apple ruled the earth. So, once again, we can understand the lack of
surrounding the Frenchman's appointment. (Or as they say around Best Buy's headquarters in Richfield, Minn.,
autres temps, autres m¿urs
Then again, it's not like Best Buy investors are in a mad rush to jump back in bed with the chain's founder Richard Schulze. Schulze announced his plan earlier this month to team up with private equity partners and buy the company for $24 to $26 per share. The Street, however, doesn't seem to take his offer seriously. Or at least they won't until he puts more skin in the game, which is why the stock now resides below $18.
As for Best Buy's board, well, they have to take Schulze somewhat seriously considering he is the company's largest shareholder. Nevertheless, at this juncture they are looking forward to Joly as a potential savior, rather than backwards for another go-around with Schulze. The company, which, by the way, posted a 90% drop in net income on Tuesday, said Schulze declined its offer to take a buyout offer directly to shareholders. Schulze, of course, claims otherwise.
Honestly, while we are scratching our heads over the selection of Joly, we certainly agree with the board that
le temps, c'est de l'argent
and they need to start saving the company instead of dealing with Schulze, who has turned himself into (pardon our French) a huge pain in the ass.
2. Thiel Lacks Appeal
Look, we don't care if
director Peter Thiel unloads his shares. Let him throw the millions on the pile. He's a venture capitalist, that's what they do.
We just want to know what happened to the company's CEO Mark Zuckerberg? You remember him, right? Reddish hair. Hoodie. Acts a bit like Jesse Eisenberg in
The Social Network
Hey, we've got an idea. Maybe discouraged investors should put his face on the back of a milk carton. Got Zuck?
Yes, it's been roughly three months since Facebook's infamous IPO, and while the stock continues to go down, roughly 50% from its pricing at last check, the scuttlebutt surrounding the high-profile fiasco refuses to die down. The latest bit of gossip involving the company came Tuesday with the news that Thiel
, netting about $400 million.
Thiel still owns 5.6 million shares even after his major-league purge and that's still a serious amount of skin in the game. Nevertheless, the question was raised, and raised again and again, as to whether the PayPal co-founder's decision to lighten his load was yet another sign of Facebook's apocalypse.
The answer to that question, at least our answer, is no. Not that Facebook isn't crashing and burning. It clearly is and it will continue to do so until Zuck emerges from the billionaire protection program waving a mobile strategy for his company.
But as it relates to Thiel's sale, the venture capitalist filed his intentions with the Securities and Exchange Commission on May 18, well before the stock hit the fan. So while his timing looks next to awful, and it's true that he could have altered or spiked it, we'll give him the benefit of the doubt that he didn't mean to kick his own company while it was down.
Nevertheless, we do believe that as a director, and a high-profile one at that, Thiel should be encouraging the brass at Facebook to show their faces in order to reverse the public perception that the offering was just one big money suck. And since he scored big on the IPO -- his original investment was $500,000 in 2004 -- Thiel can do a lot to help on that score.
1. Wet Seal's Poison Pill
( WTSLA) investors haven't swallowed enough bad decisions from the company's management, now they are being forced to gulp down a poison pill.
The struggling women's clothes retailer adopted a shareholder rights plan -- aka poison pill strategy -- this week to block a suitor from acquiring 10% or more of the company. The pill, which expires in June 2013, essentially dilutes the snot out of the stock should somebody try and seize control of the company.
The board, which has also engaged a pair of investment banks "to pursue strategic options," put the plan in place as a response to the Clinton Group, which owns 5.1% of Wet Seal stock and has been pushing management to sell the company.
"We took this action to insure the board has sufficient time to consider any option," said Wet Seal Chairman Harold Kahn on a conference call with analysts. Wet Seal posted a second-quarter net loss of $12.4 million Tuesday, compared with net income of $2.2 million last year. The company reported an 11% decline in second-quarter same-store sales. Wet Seal shares fell more than 10% on Wednesday and are down almost 40% in the past year.
Sufficient time? Give us a break Harold. You fired CEO Susan McGalla just a few weeks ago after she presided over 11 straight months of declining same-store sales. That's plenty of time in our book. Why not give somebody else a turn to run the show if they are willing to bid for it? All your shareholder rights plan is doing -- aside from taking away shareholder rights that is -- is giving more time for investors to get out of the stock and less incentive for others to get in.
Well, to be perfectly thorough, there are some other incentives involved with the plan as well. According to the company's recent 8-K filing, Wet Seal is putting aside $1.2 million to retain senior leadership during the transition. Or in other words, despite the company's cruddy performance, these folks are getting a bonus to stick around.
Same goes for Kahn himself. He was rewarded with a grant of $500,000 in restricted stock in lieu of the $75,000 in cash he usually pockets as chairman. Meanwhile, members of the company's Strategic Oversight Committee will each get a $90,000 grant of restricted stock for their troubles.
Or, more precisely, for Wet Seal's troubles.
Written by Gregg Greenberg in New York
Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.