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On my listing for a slamming right this moment is super-hyped cloud play Snowflake (SNOW).
So I used to be driving dwelling final evening and heard Snowflake’s CEO Frank Slootman — a mega gazillionaire who loves crusing yachts however can also be a grasp at constructing tech companies — doing an interview with a YF competitor. On with him is somebody I by no means heard of earlier than, Sridhar Ramaswamy, who was being described because the incoming CEO of Snowflake.
My first response was, “Wait — how did I miss this tonight, and why was I paying a lot consideration to Salesforce’s earnings?”
I slammed the brakes on my new automobile and pulled off from the busy freeway to look at the interview (sure, for actual), the place I discovered two smiling execs yucking it up with the host. The host recommended Slootman signaled strongly to him in a not-so-distant previous dialog that he was going to step down.
Memo to Frank and to the whole Snowflake board: You probably did a horrible job signaling this was coming in any type. And now the common investor (who would not have entry to Frank Slootman) is left holding the bag on a super-hyped tech inventory — shares are crashing greater than 23% as of this writing.
The Avenue was typically shocked right here.
“Snowflake shocked buyers on numerous fronts final evening: its tremendously profitable CEO is retiring efficient instantly after he stated he wasn’t going wherever simply 7 months in the past,” Guggenheim analyst John Difuci wrote in a consumer be aware.
Stifel analyst Brad Reback additionally known as Slootman’s exit a “shock.”
Backside line: CEOs have a duty to sign when they might not need the highest job, both as a result of they’re burned out, wish to play golf, or are eager on shopping for one other yacht. And it is the board’s job to make sure this course of is dealt with first-rate, from exterior communications to inner communications.
If it is not dealt with proper, you possibly can get Slootmanned, excuse me, and expertise a pointy inventory sell-off due to a shock shift within the C-suite.
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