On my listing for a slamming as we speak is super-hyped cloud play Snowflake (SNOW).
So I’m driving house final night time and listen to Snowflake’s CEO Frank Slootman — a mega gazillionaire who loves crusing yachts however can be a grasp at what he does in constructing tech companies — and he’s doing an interview with a YF competitor. On with him is somebody I by no means heard of earlier than, Sridhar Ramaswamy. Stated particular person is 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 (CRM) earnings?”
I slam the brakes on my new automobile and pull off from the busy freeway to look at the interview (sure, for actual), the place I discover two smiling execs yucking it up with the host. The host suggests Slootman signaled strongly to him in a not-so-distant previous dialog that he was going to step down.
Memo to Frank and to your complete Snowflake board: you probably did a horrible job signaling this was coming in any type. And now the typical 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 usually shocked right here.
“Snowflake stunned traders on a variety of fronts final night time: its tremendously profitable CEO is retiring efficient instantly after he stated he wasn’t going anyplace simply 7 months in the past,” stated Guggenheim analyst John Diffuci in a shopper be aware.
Stifel analyst Brad Reback additionally known as Slootman’s exit a “shock.”
Backside line: CEOs have a accountability 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 inside communications.
If it is not dealt with proper, you possibly can get Slootmanned — excuse me, expertise a pointy inventory sell-off due to a shock shift within the C-suite.