Tuesday, June 12, 2012

Nasdaq CEO Goes AWOP (Absent Without Phone)...Has He Never Heard of Radio Shack?

 Mr. Greifeld couldn't talk. Having monitored the rocky process from Silicon Valley, where he had gone to join Facebook executives in remotely ringing the market's opening bell, he concluded the worst problems were fixed and caught a noon flight back to the East Coast.
 So, marooned for almost five hours in business class with a phone he says didn't work, he didn't realize that continuing breakdowns at his exchange had left countless investors not knowing how many Facebook shares they had bought or sold and at what price, nor did he know the SEC chief wanted to reach him.
—“Nasdaq CEO Loses Touch Amid Facebook Chaos,” Wall Street Journal, June 11, 2012
 Yesterday’s Wall Street Journal piece on the CEO at the center of the Facebook debacle—Robert Greifeld, of Nasdaq—which you can read with a subscription here or find elsewhere floating around the Internet, is remarkable in at least three ways.
 The first is the image of Greifeld, who had flown out to Silicon Valley for the opening hoopla, “listening on his private company line” for crucial updates to the faltering IPO while “hoping his cellphone battery would hold.”
 Did he never hear of Radio Shack?
 The second head-scratcher, which surely jumped off the screen for anybody under the age of 30, or 40, or even 50, is Greifeld’s excuse that, after he “decided to make a run for the airport to get back to the East Coast by late afternoon,” he found he couldn’t monitor the unfolding disaster or speak with the SEC Chairman who was trying to find him because the “armrest phone” in his United Airlines business class seat on the flight back to JFK didn’t work.
 Did he never hear of Virgin America? You can put in a full day’s work flying across the country on Virgin—and you don’t need a business class ticket to do it—thanks to their ubiquitous, and excellent, WiFi network.
 And what CEO of any company—let alone a company that depends on computers, networks and all manner of high technology to earn a living—would get on a plane equipped with nothing better than decades-old, germ-festering armrest phones to stay in contact on the biggest day in his company’s history?
 The third, most egregious, and least defensible howler was Greifeld’s twice-used college sophomore-level excuse to explain unexplainable behavior: he passed the buck to NASDAQ’s techies.
 “When they say yes, we say go,” he tells the Journal, which also wrote:
 During the IPO, he says he went with the best information he had from technology officials in Nasdaq’s headquarters…they expected to fix remaining problems promptly.
 If Jamie Dimon had used that excuse to explain his London Whale problem, he’d have been out the door at JP Morgan so fast it would make your head spin.
 Unlike the CEO of JP Morgan—who admitted to a problem, took the blame, and is prepared to go to Congress to take the heat from the uninformed weasels of Capital Hill—the CEO of Nasdaq seems to be doing his best to explain his Absent-Without-Phone behavior by blaming everybody but himself.
 Let’s see how long that lasts.  And how long he lasts, come to think of it...

Jeff Matthews
Author “Secrets in Plain Sight: Business and Investing Secrets of Warren Buffett”
(eBooks on Investing, 2012)    Available now at Amazon.com

© 2012 NotMakingThisUp, LLC
The content contained in this blog represents only the opinions of Mr. Matthews.   Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations.  This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever.  Also, this blog is not a solicitation of business by Mr. Matthews: all inquiries will be ignored.  And if you think Mr. Matthews is kidding about that, he is not.  The content herein is intended solely for the entertainment of the reader, and the author.


Anonymous said...

What did I miss? I don't recall Jamie Dimon personnaly taking the blame. He kicked out a couple of executives, talked about clawing back part of past bonuses for the personnel involved (what about himself?). But I don't remember him falling on his sword. In fact, I do remember reading about him saying he did not know what was going on in the investments of the CIO. Surprising, since this is such a significant operation. It will be interesting to know how those losses were the result of a hedging operation (as J Dimon says) as opposed to an outright, risk-taking trade. If it were found to be a risk-taking position, then J Dimon going through the exit could make our heads spin.

Ed said...

Technology experts like him who use a phone as an excuse for not getting in touch are definitely questionable. It's an excuse that might have worked a decade ago but today it has grown whiskers it's so old and unrealistic.