Meat - I agree 100%. From a post I did on the yahoo board today, comparing the management of expectations done by Capellas at CPQ to that of Michael Dell -
Capellas inherited a company with deep structural problems, bad employee morale, and a weakening business case. DELL has a much stronger fundamental business, with no significant weaknesses, and is growing at twice CPQ's rate.
Since Capellas became CEO, the company has provided accurate guidance on every aspect of its business, and has delivered on that guidance. DELL in the same period has confused the street and revised guidance in 3 of the last 5 quarters.
When Capellas took over as CEO, CPQ stock price was at 24. It is 25 and change today. But when Capellas took over, DELL stock price was at 44. Today it is at 25 and change. CPQ at break even, DELL down 40%. I don't think you need any deep analysis to figure out which of those is better performance.
If Michael Dell took a leaf out of Capellas' playbook, DELL stock would be in the high 40's now. DELL is a much healthier company than CPQ. The huge drop in stock price can be traced directly to MSD's management of street expectations and predictability, areas where Capellas gets star ratings.
....
I think that Michael Dell is a great businessman but he needs to become a great CEO for a leading company. He is still acting like the scrappy startup CEO. The messages put out by Vanderslice and Rollins at the analyst conference are much more like the kind of things that Capellas has been saying. Michael Dell needs to reinforce those messages. Then maybe we can see DELL's stock price get back to where it's business performance says that price should be. |
