The 5 Dumbest Things on Wall Street This Week: Nov. 16
5. Lockheed Goes Loony
Poor, poor Christopher Kubasik. Lockheed Martin's (LMT) next CEO just couldn't keep his weapon of self-destruction in his pants.
Last Friday, the defense contractor ousted Kubasik, the company's president who was scheduled to take the top job from the retiring Robert Stevens in January, over an improper relationship with an employee. Lockheed said an ethics investigation confirmed that the married executive had a close personal relationship with a subordinate, violating the company's code of ethics and business conduct.
"I regret that my conduct in this matter did not meet the standards to which I have always held myself," said Kubasik in a statement.
Well, clearly that wasn't the case, because if Kubasik held himself, and not his underling, then he would still have his job right now.
That said, Kubasik's womanizing did have one positive outcome in that it opened the door for another woman to break through the executive glass ceiling. The company said Marillyn Hewson, a 29-year Lockheed veteran, will take Kubasik's spot in the corner office just in time to navigate the so-called fiscal cliff. Since 82% of Lockheed's sales last year came from the U.S. government, any fiscal cliff-related defense spending cutbacks will surely hit Lockheed where it hurts.
And speaking of getting hit where it hurts, what we want to know is why Kubasik didn't heed the warnings of other CEOs recently booted for improperly mingling with the help. It's not like the dismissals of Brian Dunn from Best Buy (BBY) or Mark Hurd from Hewlett-Packard(HPQ) were kept confidential or anything. These were well-reported terminations and should have been warning shots for any CEO engaged in such fireable offenses, not just ones with firsthand access to F-16 Falcons.
Who knows, maybe the resignation of CIA Director David Petraeus will finally teach these overly randy CEOs a lesson about the dangers of simultaneously holding a mistress and a powerful office. If America's top mole can't keep a secret under wraps, then these morons should simply give up trying.
4. Penney's Apoplexy
Congratulations JC Penney (JCP) CEO Ron Johnson. You win. We here at the Five Dumbest Lab tried as best as we could to keep up with your maniacal pricing maneuvers and ever-shifting sales strategies, but you simply proved too much for us to handle.
Like your stock, which sank to 52-week low of $17 this week, we bow down to you.
So what finally made us submit? Why throw in the towel now after weathering all these weeks and months of Ron's recklessness?
Believe it or not, it wasn't the humbled retailer's rotten third-quarter earnings report last Friday. The Plano, Texas-based company said it lost 56 cents per share, or $123 million, in the quarter, compared with a loss of $143 million, or 67 cents per share last year. Revenue dropped 27% year-over-year to $2.93 billion. Wall Street was looking for a loss of 15 cents a share on revenue of $3.27 billion.