The Blue Meanies Strike Back
Posted by Eddy Elfenbein on February 8th, 2007 at 11:32 am

If you ever find yourself literally Crossing Wall Street, please — no iPods.

The Irrational Quest for Charismatic CEOs
Posted by Eddy Elfenbein on February 8th, 2007 at 11:25 am

Here’s part of an interview with Harvard professor, Rakesh Khurana, on his book Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs:

Lagace: CEOs are suddenly very much in the spotlight, but you have been studying the dynamics of CEO successions for a number of years. What drove you to examine this topic in such depth? What surprised you most in your research?
Khurana: I guess one could have accused me of being opportunistic in writing this book, but the fact is the book was finished last year and is only now getting published. I actually wrote my dissertation in 1998 on this topic.
The common thread that got me started on studying CEOs is evident in my body of work in exploring the forces that govern the process of CEO change. I have conducted research in four interrelated areas: factors that lead to vacancies in the CEO position; factors that affect the choice of successors; the role of market intermediaries such as executive search firms in the CEO search; and the consequences of CEO succession and selection decisions for subsequent firm performance and strategic choices.
What surprised me most was that the CEO labor market is not a market in any traditional sense of the term. Rather, it resembled more of a closed ecosystem in which selection decisions were based on highly stylized criteria that often had little to do with the problems a firm was confronting.
Although I did not at first believe the results, the evidence was overwhelming and not pretty. The rise in the power of institutional investors has led to the creation of an “external” market for CEOs that is wracked with irrational decision making. Increasingly, the emphasis was more on bringing in a ruthless outsider to boost the performance of an under-performing company than on grooming leadership within the company. A famous CEO was preferred over a low-profile CEO, as the former was seen as a boost to public and investor confidence—and share prices—fast.

Liz Claman is now CNBC’s anti-Maria Bartiromo
Posted by Eddy Elfenbein on February 8th, 2007 at 11:05 am

From Jon Friedman at MarketWatch:

You could call Liz Claman CNBC’s anti-Maria Bartiromo, a counterpoint to controversy.
In recent weeks, CNBC has received a flood of negative publicity. Bartiromo, CNBC’s biggest star, was accused of getting too close to one of her sources. Bartiromo got so much coverage that it seemed as if CNBC consisted of one superstar anchor.
By contrast, the unpretentious Claman, who joined CNBC in 1998 and now anchors “Morning Call,” almost seems out of place in TV news. After all, this is a business which cranks out divas with the precision of a Detroit assembly line rolling out new cars.
“You can’t start believing your own press clippings,” Claman told me. “Your vision gets clouded.”

Why is Yahoo Going for $30
Posted by Eddy Elfenbein on February 8th, 2007 at 10:21 am

Can anyone tell my why Yahoo (YHOO) is going for $30 a share?
Seriously, I just don’t get it. I’m always looking at stocks and asking myself if the price “makes sense.” Usually they do, sometimes they don’t. But Yahoo? Sheesh…it’s not even in the ballpark.
Here’s a quick look as some valuations:

A look at the P/E ratio based on next year’s earnings is far from a perfect valuation measure, but it gives you an idea of just how pricey Yahoo is. I don’t see how Yahoo can be that much higher than Google and Apple.
Make no mistake: Yahoo had a very good earnings report last quarter. The company topped expectations by six cents a share (19 to 13). But still, Yahoo’s revenues grew by 13%. Is that enough to justify this valuation?

Varian Joins the S&P 500
Posted by Eddy Elfenbein on February 8th, 2007 at 9:44 am

Congratulations to Varian Medical Systems (VAR) for its inclusion in the S&P 500. This is Wall Street’s equivalent of being a “made man.” The opening was made thanks to Blackstone’s acquistion of Equity Office.
Also, Joe Bank (JOSB) just raised its forecast for this year to $2.25 a share from its earlier estimate of $2.15.
Finally, Harley (HOG) said it will miss Q1 shipment targets due to the strike.

The Disposition Effect
Posted by Eddy Elfenbein on February 8th, 2007 at 7:02 am

From Wikipedia.

The Disposition Effect is an anomaly discovered in Behavioral Finance. It relates to the tendency of investors to sell shares whose price is increasing, while keeping assets that have dropped in value.

Don’t let this happen to you.

The Buy List So Far
Posted by Eddy Elfenbein on February 7th, 2007 at 5:07 pm

Through today, the Buy List is up 2.54% (the red line) versus 2.24% for the S&P 500 (the black line).

WR Berkley (BER), one of our weaker stocks this year, reports tomorrow after the close.

CNBC Newsbabes in Cocktail Dresses
Posted by Eddy Elfenbein on February 7th, 2007 at 2:14 pm

Featuring Liz and her Clamen in a Vera Wang.

Welcome Back, Carney
Posted by Eddy Elfenbein on February 7th, 2007 at 1:42 pm

We at Crossing Wall Street are very pleased to welcome back John Carney of DealBreaker to the world of blogging.
For the last three weeks, John was out while he was recuperating from a (ahem) “car accident” of some sort. We’ve constructed a timeline of the relevant events.
January 13: Lindsay Lohan checks into rehab.
January 14: John’s “accident.”
February 6: Lindsay Lohan checks out of rehab.
February 7: John returns.
We encourage you not to put two and two together* (although didn’t the Beatles try something like this).
Welcome back, John. We’ve missed you.
*And rehab is so ’05 anyway.

Highlights from Cisco’s Conference Call
Posted by Eddy Elfenbein on February 7th, 2007 at 12:13 pm

Courtesy of SeekingAlpha:
#1

Operator: Thank you. And our first question from Brant Thompson, Goldman Sachs.
(The call doesn’t go through)
We’ll move to our next question.
John Chambers: Brant, we’ll get back to you. If you’d replace the phone call for some reason it didn’t go through. Probably not using a Cisco IP phone. We’ll give you a special discount if you want one.

#2

Charlie Giancarlo: So we view it as a very promising new area for us. Already many hundreds of millions of dollars for us in revenue. And we really see it as being something that will allow us to gain market share and achieve our growth goals there.
John Chambers: Jeff, two comments. For those of you that haven’t heard Charlie talk very often, that’s has excited as Charlie gets.

#3

John Chambers: The exciting thing is that video in my opinion. I’ve never seen there was a killer App until I talked about video.

Flashback to 2001.

“E-learning is the next major killer application,” Cisco CEO John Chambers proclaimed in his keynote here Monday.

#4

Bill Choi – Jeffries: Okay. Thanks. Maybe two quick questions, sir. One, you talked about loosely and then tightly coupling of product architecture strategy. As far as video strength we’re seeing, so far it seems to be very assay specific.
Can you talk about when you anticipate the tight coupling of this, particularly in the 9K as our markets into the routing space when do you expect the strength to occur? And then a follow-up question on switching.
John Chambers: Let me ask, which one do you want? I apologize, because Blair is going to shoot me about talking too long. Give us one question. And I apologize for holding you to one? Would you want the answer to that first one or would you want us to do the second one?
Bill Choi – Jeffries: Let’s do the second one. Switching…
John Chambers: I had a good answer to that first one.

(Hat Tip: Owen Thomas).