It looks like the CEOs of GameStop (GME), BlackBerry (BB), Koss Corporation (KOSS), AMC Entertainment (AMC) and others who have seen their fundamentally beleagured companies trade over the past few weeks, a leadership lesson from Don Corleone.
It’s never letting anyone outside your family know what you think. Because the alleged public faces of these founding entities were mostly anything but public in their reactions during the Reddit-powered trading boom. In fact, at least in the eyes of John Q. Public, they missed out on action.
“I’m stunned. You know I’m sure they issued a gag order to employees, but I’m stunned that the CEOs said nothing further,” said David Callaway, former CEO of the then exchange-traded financial media. equipment TheStreet. Callaway, now the founder of the newsletter on climate finance, Callaway Climate Insights, believes that all these CEOs should at least reveal something that is doing business in the midst of insanity.
“People want to know what the hell is going on, and there are a lot of implications for the stocks that are moving for everyone. So of course they will wait until it calms down, but I’m surprised they are no longer proactive,” Callaway added.
What was going on was certainly nothing that George Sherman, CEO of GameStop, John Chen, CEO of BlackBerry, and Michael Koss, CEO of Koss Corporation, saw in their executive careers.
GameStop (which became the face of mania) rose to an intraday record high of $ 483 on January 28 when retailers banded together on Reddit to shorten institutional investors’ shares. At the price, SherStop CEO Sherman saw his stake in the company valued at $ 1.1 billion on paper. Sherman joined GameStop in 2019 on an annual salary of $ 1.1 million, according to documents from the U.S. Securities and Exchange Commission (SEC).
Shares of the video game retailer have since plummeted again to the ground and were trading at around $ 64 as of Monday morning as Reddit retailers search for their next target. Yet there is not a public glance at Sherman at anything that goes on with the stock. He did not even comment in a press release on February 3 on the announcement of a new chief technology officer who will oversee the company’s e-commerce business. Usually the level of rent will yield a CEO in the press release.
The last time Sherman was heard was a January 28 press release outlining GameStop’s human rights initiatives. Sherman last acknowledged in a January 11 press release business trends revealing the performance of holiday sales – this came before the explosion in the share price.
GameStop did not want to make Sherman available for an interview for this story. Shocker.
Mom was the word for BlackBerry and its longtime CEO, John Chen, even with its share at some point in January up 317% for the year. But unlike GameStop, BlackBerry has at least acknowledged what’s happening in the real world.
“The company is not aware of any material, unknown corporate developments and has no material change in its affairs or matters not made public, which could offset the recent increase in the market price or trading volume of its ordinary shares, said BlackBerry. said in a January 25 statement.
Chen did not give a quote in that press release. BlackBerry did not respond to Yahoo Finance’s request to make Chen available for an interview for this story. The stock has lost more than 200% since reaching a record high of $ 28.70 on the day. January 28th.
Speaker manufacturer Koss Corporation had a share price rise of more than 1,700% on January 29th. Not a glimpse of CEO Koss during the run-up. The company announced its second fiscal quarter earnings on January 28 and did not acknowledge the volatility in the share price in the press release. There was no earnings call.
However, Koss and others internally at the company speak loudly through their actions.
The WSJ reported that nine Koss insiders sold more than $ 40 million in stock early last week. Three of the inner circles (including Michael Koss) were members of the founding family Koss. These inside sales can be viewed here.
An email to Koss for comment on trading activity was unanswered.
If any CEO deserves a modest tip from the cap, it’s AMC Entertainment’s leading dog, Adam Aron.
Aron used the 222% return on its share (at one point in late January, the stock was up more than 880%) to secure millions of dollars in new capital to help its theater chain survive the COVID-19 pandemic. Management also appeared on a January 25 press release.
“Today the sun is shining for AMC. After securing more than $ 1 billion in cash between April and November 2020, through equities and debt increases, coupled with a modest amount of asset sales, we are proud to announce today that the past six years “AMC has raised an additional capital injection of $ 917 million to strengthen and strengthen our liquidity and financial position. This means that any talk of an imminent bankruptcy for AMC is completely off the table,” said Aron.
A fine line ‘
Some people say that it would be unwise to publicly comment on a share price, especially during this degree of volatility. Hence the silence of the said drivers.
“As CEO, you can not be focused on the volatility of the share price or irrational market behavior. This is a distraction. Focus on what you can control what is the excellence and growth in the industry. These are the fundamentals that the value of “If it’s in place, the market will follow for better or worse, ” said former Nutrisystem CEO and board director Dawn Zier.
Former SEC insider Alma Angotti believes CEOs should remain silent until the dust settles.
“It’s very difficult when your GameStop is making sure you’re not saying something that appears to be false or misleading,” says Angotti, currently a partner at Guidehouse. “I’m very sure that if they end up in this situation, the CEOs will talk to their security lawyers just as much as they do to their PR people to decide what we can say that cannot be considered if the share price moves wrong. either way. It’s a fine line. ‘
Whether these CEOs are currently sitting backwards with a view to future vacations on tropical islands they are going to own is unclear, as none of them have shown their face through the madness of buying. But Callaway believes there are several basic actions these top executives need to take internally.
This includes (1) reaching out to all major shareholders and all major customers to reiterate that the mania does not harm financial performance; (2) sending reminder messages to employees not to talk about the situation on social media; and (3) launch a board committee to investigate the impact of the share price gain on employee compensation schemes.
Point out that Zier, “as a board member and CEO, the potential impact on remuneration and retention of executives should be considered as an illegal market volatility that is not dependent on fundamental drivers? Risk within a leadership team, among others. ‘
It is good to see that these former CEOs are expressing the current situation. Maybe the CEOs of GameStop, BlackBerry, Koss Corporation and others in the stock world can learn a few things here.
Brian Sozzi is a general editor and anchor by Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and so on LinkedIn.
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