Investors Yawn as Cyberworks's Li Says That He May Hire a New CEO
By MATT POTTINGER
Staff Reporter of THE WALL STREET JOURNAL
HONG KONG -- Throughout Pacific Century CyberWorks' dizzying history -- first as a brash emblem of the Internet boom, and more recently as a deflated victim of the dot-com bust -- the company's young leader, Hong Kong billionaire Richard Li, has always been the center of public attention.
So when investors found out Thursday the 34-year-old Mr. Li may step aside next year as chief executive, their reaction may have come as humbling: They yawned.
Stock in PCCW, Hong Kong's biggest telephone and Internet company, rose 1% to end at 2.73 Hong Kong dollars (35 U.S. cents) in light trade after Mr. Li told reporters he might relinquish the position next year while keeping his role as executive chairman. The ho-hum investor response suggests PCCW could afford to bring new blood to the job without doing further damage to its share price, which is languishing at 10% of its peak last year.
"Let me put it this way: It will not harm the image of the company," said Didier Devreese, a senior fund manager at ING Investment Management Asia Pacific. "There has been a lot of controversy in the market regarding his leadership." Like many investment funds, ING began dumping its shares in PCCW last year after technology stocks collapsed and it became unclear how the company would make money.
1Analysts Missed the Mark on PCCW
PCCW has grown in the past year into a hodgepodge of Internet investments -- from interactive-video programming to e-commerce companies -- combined with a traditional telephone business. PCCW bought the former Hong Kong phone monopoly Cable & Wireless HKT with a stock-based US$29 billion bid last year.
On Thursday, PCCW said it may find an executive to take over day-to-day operations from Mr. Li.
"Richard Li is not stepping down from his current role as executive chairman," spokeswoman Joan Wagner said. "But he would consider appointing a CEO to run the company on a day-to-day basis after annual results are reported next year." The company's annual results would probably be reported next March.
She denied a report that PCCW had already hired headhunters to find a successor but added the company did have agencies searching for new board members. Last month the company brought in former J.P. Morgan Chase senior executive Frederick Ma as an executive director to lead efforts to make the company profitable -- and to resurrect PCCW's image as a rising star of the digital age.
The firm in March reported a consolidated loss of US$886 million for 2000, including a US$667 million write-down on the value of soured Internet investments.
And in an embarrassing episode, a reporter revealed that Mr. Li -- who is also PCCW's largest shareholder -- never graduated from Stanford University, as the company had said in materials distributed to journalists and published on its Web site. Mr. Li attended Stanford as an undergraduate but left a few months before his scheduled graduation date.
Mr. Li is also the son of one of Hong Kong's richest and most powerful men, Li Ka-shing, whose global business empire encompasses real estate, container ports, retailing and telecommunications.
"It probably would help their share price if they brought in someone who was experienced in the business and was well-respected," Mr. Devreese said.
Write to Matt Pottinger at matt.pottinger@awsj.com2
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