CEO overboard!
As Randy Fowler splashes into the water this morning, most people on the thread are cheering -- either for him, or for his fall. I think I will do a bit of both, myself.
You have to give him credit for getting Identix to the point where it is today: the biometric company with the best chance of grabbing the golden chalice. He did it by seeing further than the competition, especially his first competitors in the live scan marketplace. He was also never satisfied to stand still, and began acquiring companies at a pretty fast clip. That put him in position to get Identicator, which was the key move of his career, and secured IDX the lead biometric authntication hardware and software over dozens of competitors.
However, the IDT move also led to his downfall today. No company founder, let alone one in reasonably good health and with the strong personality of Randy Fowler, just decides one day -- when the stock price is pretty depressed -- to quit at the age of 60. Not when his dreams are still in front of him. He had to have been pushed into the water. The PR today doesn't indicate otherwise.
Who could displace him? Only members of the Board of Directors and significant stockholders. He must have been opposed by the IDT stockholders, who have about 5 million shares. He also probably was facing opposition from the new holders in the private placement, who own about another 3 million shares. They are presently underwater in their investment (and you haven't seen a CSFB buy recommendation yet, have you?). Even assuming support from ASCOM, Fowler would have lost control of the insider shares.
It wouldn't have been wise for him to fight it out in this situation, since he would be sure to lose in one of two ways: (1) He gets ousted by the Board of Directors in a public fight; or (2) He wins, and the IDT key people (Grant Evans and the two Yuris) leave. That threat would be reason enough for Fowler to lose critical support. At this stage in the company's development, the IDT leadership is more important than the CEO. We can also hope that this CEO change can facilitate private placement of the ASCOM shares, perhaps to MOT. If we see that, you can also assume that the ASCOM buyer supported this change of regime.
Fowler may have understood that the IDT technology is important, but it is doubtful that he had the instinctive understanding of the technologies and markets necessary to carry the company forward from here. And he is 60 years old, much older than the people he's going to be making deals with. It is unfair, but I think IDX needs a younger CEO to work in this marketplace. (I'm not going to go into personality issues, since I never met the man.)
The PR noted that Fowler's last day would be March 31 -- the last day of the upcoming quarter. I guess that means that new management wouldn't take the risk of another bad quarter, and if there is a disappointment, IDX can shrug it off by pointing to new leadership. Consider the timing of his resignation an insurance policy.
Who do we get? I don't have a clue. I hope it is an outsider who carries a lot of respect. Someone who will be onboard by April 1. Someone who will come in with a much higher salary, by the way, and a boatload of options. Don't complain -- that is a given here. I expect that Scullion will leave within twelve months, too, and that Grant Evans will become even more important to the company. I think we'll be seeing more and better PR from Identix, and I will hope we get better analyst coverage.
To borrow from Buck (who won't get his $5 buy-in opportunity), "Onward and upward!" |
