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General Electric stock surges after the conglomerate gives its CEO the boot after 14 months.
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The Hustle
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Sponsored by
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<h2 style="font-family: arial, sans-serif; font-size: 26px; font-weight: bold; line-height: 120%; margin-bottom: 16px; margin-top: 36px;">
<strong>
GE stock temporarily soars after CEO, John Flannery, is ousted
</strong>
</h2>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Yesterday, General Electric unexpectedly
<a style="color: #ed4d1f; text-decoration: none;">
terminated
</a>
their CEO of 14 months, John Flannery, and replaced him with Larry Culp, the first “outside” chief in the company’s 126-year history.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
At first blush, it seems like yet another hitch in a terrible year for the beleaguered energy giant — but the news actually sent GE stock
<a style="color: #ed4d1f; text-decoration: none;">
soaring
</a>
by as much as 16%.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
Turns out, fired CEOs are good for stock
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Wall Street isn’t typically a big fan of being blindsided by corporate shake-ups… with some exceptions.
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<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Historically,
<a style="color: #ed4d1f; text-decoration: none;">
studies
</a>
have shown that when a business isn’t performing so hot, an ousting like Flannery’s gives risk-tolerant investors a renewed sense of hope. As a result, stock goes up.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
This “pop” usually doesn’t last long, though: Investors soon realize that a new CEO is often just a Band-Aid solution for much deeper issues.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
When the scandal-ridden pharma company, Valeant, replaced its CEO in 2016, stock
<a style="color: #ed4d1f; text-decoration: none;">
shot up
</a>
14%, but quickly flatlined. Likewise, when Dick Costolo
<a style="color: #ed4d1f; text-decoration: none;">
quit
</a>
as Twitter’s CEO in ’15, an 8% temporary increase was followed by a multi-year stagnation.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
GE has bigger problems than an ineffective CEO
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
The company has been in a long, slow decline since its heyday in the ’90s, when stock hit $51 per share under CEO Jack Welch.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Jeff Immelt, who succeeded Welch, led GE through
<a style="color: #ed4d1f; text-decoration: none;">
years
</a>
of “poorly timed deals and needless complexity” — all of which were inherited by Flannery when he took over the reigns in August 2017.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
In 2018 alone, GE stock has fallen by 33%, and the company announced it will “fall short” of its 2018 profit projections due to a “weaker performance” than expected in its power division.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
Ladies and gents, Larry Culp to the plate
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
If there’s any silver lining to this, it’s that the new guy, Larry Culp, isn’t like the others.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
GE has always hired its CEOs from the inside; Culp comes from the technology giant, Danaher, which he grew from $9.7B to $50B in market cap in his
<a style="color: #ed4d1f; text-decoration: none;">
14-year helm
</a>
as CEO.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Let’s hope he rights the ship — otherwise, he’ll end up just as Culp-able as the others in GE’s fall from grace.
</p>
</td>
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<td align="center" id="link" style="font-family: 'Courier New',courier,monospace; font-size: 26px; line-height: 120%; padding: 15px 0; text-align: center;">
But can he fix the Wi-Fi on my smart oven?
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<td>
<h2 style="font-family: arial, sans-serif; font-size: 26px; font-weight: bold; line-height: 120%; margin-bottom: 16px; margin-top: 36px;">
<strong>
Husky Energy offers to buy MEG Energy for $4.9B USD
</strong>
</h2>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Calgary-based Husky Energy made an offer to take over major Canadian oil sands producer MEG Energy for $2.6B USD in a cash-and-stock deal that would also assume MEG’s debt, putting the overall “enterprise value” of the transaction at
<a style="color: #ed4d1f; text-decoration: none;">
$4.9B
</a>
.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
The move sets up a battle between a Canadian oil company linked to prominent Hong Kong billionaire
<a style="color: #ed4d1f; text-decoration: none;">
Li Ka-Shing
</a>
, and a Chinese energy giant (Cnooc) who owns a 12% stake in MEG.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
We got a battle raging for Canada’s oil sands
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
And for good reason -- when it comes to petrol huntin’, Canada’s oil sands are among the utmost premiere crude production hubs in the world. Combined, the two oil giants produce around
<a style="color: #ed4d1f; text-decoration: none;">
286k barrels a day
</a>
from oil sands.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
<a style="color: #ed4d1f; text-decoration: none;">
<em>
Bloomberg
</em>
</a>
reports that if the board and shareholders of MEG accept Husky’s bid, the 2 companies would produce more than 410k barrels of global oil equivalent every day.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
But MEG’s board of directors has remained cagey
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
While MEG declined to comment, Husky CEO Rob Peabody said the company already presented a takeover settlement to MEG this summer, but its offer was rejected.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Now, Peabody is set to travel to Toronto, Montreal, Boston, and New York over the next
<a style="color: #ed4d1f; text-decoration: none;">
2 weeks
</a>
to visit with MEG’S shareholders and bring the deal on home.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
According to Husky’s
<a style="color: #ed4d1f; text-decoration: none;">
press release
</a>
, the terms offer MEG a price 37% higher than the company’s most recent closing price, and would be Husky’s largest-ever takeover.
</p>
</td>
</tr>
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Keep your enemies closer...
</a>
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</td>
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<td>
<h2 style="font-family: arial, sans-serif; font-size: 26px; font-weight: bold; line-height: 120%; margin-bottom: 16px; margin-top: 36px;">
<strong>
California’s public businesses must invite women into the boys’ boardroom -- or pay
</strong>
</h2>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
California became the first state in the country to require public corporations to have women on their boards after Gov. Jerry Brown
<a style="color: #ed4d1f; text-decoration: none;">
signed
</a>
the bill into law on Sunday.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Taking a page out of Europe’s gender-parity playbook, male-monopolized companies must now let women into their corporate clubhouses by 2021 or face pricey penalties.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
Norway or the highway
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Gender diversity requirements are common in Europe: 12 European countries require at least
<a style="color: #ed4d1f; text-decoration: none;">
30%
</a>
female board member representation.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Now, California companies with 5 board members must have at least 2 women, and companies with 6+ members must have 3 women.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
The gender-equalizing policy seems to be working so far: The percentage of women on Norwegian corporate boards
<a style="color: #ed4d1f; text-decoration: none;">
doubled
</a>
after Norway passed a law requiring female board representation.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
Sexism just got expensive
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Hundreds of California companies have all-male boards -- including
<a style="color: #ed4d1f; text-decoration: none;">
377
</a>
on the Russell 3000 stock index (which represents America’s 3k largest stocks).
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
If any of these corporations fail to get women at the table by 2021, they will pay a $100k fine (and potentially $300k for a 2nd offense).
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
The controversial law could still be struck down as
<a style="color: #ed4d1f; text-decoration: none;">
unconstitutional
</a>
-- for discriminating on the basis of gender -- by the courts. But if the law is implemented according to plan, 684 women will have to fill all the boards seats across the Russell 3000 by 2021.
</p>
</td>
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Attaway Norway
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<td>
<h2 style="font-family: arial, sans-serif; font-size: 26px; font-weight: bold; line-height: 120%; margin-bottom: 16px; margin-top: 36px;">
<strong>
It’s still uncool to stay in school: Applications to MBA programs fell 7% this year
</strong>
</h2>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Last year, we wrote about how budding business humans were o-v-e-r shelling out
<a style="color: #ed4d1f; text-decoration: none;">
wads of cash
</a>
for an MBA degree.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
And according to a new
<a style="color: #ed4d1f; text-decoration: none;">
survey
</a>
from the Graduate Management Admission Council, the streak has continued for a 4th straight year: Business school applications fell 7% in 2018.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
Same story, different year
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Once a prerequisite for climbing the ranks to a corner office at corporate, the business degree has lost prominence among a new generation of students who are seeking out shorter, more specialized degrees.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
There’s another reason at play: International students, who have historically served as a solid market for US business schools, are facing taller hurdles with work visas, and their enrollment has seen a
<a style="color: #ed4d1f; text-decoration: none;">
11% YoY
</a>
decline.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
This time around, even the Ivys are feelin’ the pinch
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Up until now, hallmark business schools like Harvard and Wharton School of Business seemed immune to declining applications (top-tier schools received more than half of all business-school applications in 2017).
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
But, for the first time in nearly a decade, they were hit with the same mounting disinterest that
<em>
less prestigious
</em>
programs have felt since the word “startup” was invented: Harvard apps are down
<a style="color: #ed4d1f; text-decoration: none;">
4.5%
</a>
from last year, and Wharton’s, 6.7%.
</p>
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Don’t fear the reaper
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<h2 style="font-family: arial, sans-serif; font-size: 26px; font-weight: bold; line-height: 120%; margin-bottom: 16px; margin-top: 36px;">
<strong>
There are couches, and then there’s Burrow
</strong>
</h2>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
It’s like coffee: There’s big batch, and then there’s pour-over.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Founded just 2 years ago,
<a style="color: #ed4d1f; text-decoration: none;">
Burrow
</a>
is rethinking what it means to take-a-load off with their line of customizable modern furniture.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
As feature-chasers, we’re impressed.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
There’s plenty of
<a style="color: #ed4d1f; text-decoration: none;">
reasons
</a>
to worship Burrow furniture, from its thoughtful design, industry-leading durability, commitment to sustainable materials, built-in USB port, and no-tool assembly -- but the thing that sold us?
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
It’s furniture
</strong>
<em>
<strong>
delivered
</strong>
</em>
<strong>
to your door… for free
</strong>
</h4>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Say goodbye to borrowing your buddy’s truck to pick up a couch from the shady furniture store 20 miles away. Every piece of Burrow furniture is delivered to your door for free -- cutting out expensive markups in the process.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Plus, it’s delivered in boxes. When it’s time to move, your furniture packs down into a few easy-to-assemble pieces. No heavy lifting, no damage in transit, and no more arguments on how best to turn the corner (PIVOT!) -- just furniture that moves with you and lasts a lifetime.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
But hey, sitting is believing. Better yet, their Fall Sale is happening now. Use the code
<strong>
FALL18
</strong>
at checkout to get up to $500 off your order.
</p>
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Uplevel your binge →
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<img alt="Toolbox" height="30" src="https://inboxflows.com/_/image/https%253A%252F%252Fs3-us-west-1.amazonaws.com%252Fthdaily%252Ftoolbox.jpg/?inbox_flows_img_sig=eyJwYXRoIjoiaHR0cHMlM0ElMkYlMkZzMy11cy13ZXN0LSJ9:1kXP7Q:Qq7ClAD-AUxJN9r7NgMIrcSt78STHnosxUHp4ReHNKk" style="height: 30px; width: 46px;" width="46"/>
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from our toolbox
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<strong>
Note:
</strong>
These are not advertisements or affiliate links. The Toolbox section is where we write about products that we truly love and have used for starting/growing our business.
</p>
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<h2 style="font-family: arial, sans-serif; font-size: 26px; font-weight: bold; line-height: 120%; margin-bottom: 16px; margin-top: 36px;">
<em>
<strong>
The Messy Middle
</strong>
</em>
<strong>
: A field guide for the part of entrepreneurship no one talks about
</strong>
</h2>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Friend of The Hustle Scott Belsky’s new book
<em>
The Messy Middle
</em>
is officially one of our favorite reads on entrepreneurship.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Why? Because it tackles the unglamorous stage that startup success stories often gloss over: After the excitement of launching a new idea fades and the end is nowhere in sight.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
As an early-stage investor in companies like Uber and Pinterest, founder of creative network Behance, and Venture Partner at VC firm Benchmark, Belsky knows firsthand that starting a business isn’t the hardest part -- it’s running one.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
Featuring learnings from Belsky and a host of other leaders, this book is about how to put your head down and “endure” when no one else knows (or cares) who you are.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
It’s about keeping teams motivated and focused on your vision in the face of uncertainty.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
It’s about
<em>
sharpening
</em>
your edge as you grow, not losing it.
</p>
<h4 style="font-family: arial, sans-serif; font-size: 18px; font-weight: bold; margin-bottom: 8px; margin-top: 16px;">
<strong>
A few of our favorite takeaways:
</strong>
</h4>
<ul style="margin: 0; padding-bottom: 14px; padding-left: 24px;">
<li style="line-height: 120%; padding: 4px 0;">
Don’t wait until “the last mile” to focus on “the first mile” (onboarding, copy, product tour) of the customer’s experience.
</li>
<li style="line-height: 120%; padding: 4px 0;">
“The only ‘sustainable competitive advantage’ in business is self-awareness.”
</li>
<li style="line-height: 120%; padding: 4px 0;">
“Insecurity work” (checking analytics, what people are saying on Twitter, team progress on projects) may make you
<em>
feel
</em>
better, but it’s not a replacement for getting sh*t done.
</li>
</ul>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
These just scratch the surface, and the entire book is brimming with quotable, actionable mantras for current and aspiring founders alike. We highly recommend giving it a read.
</p>
<p style="font-family: arial, sans-serif; font-size: 15px; line-height: 120%; margin: 0; padding-bottom: 12px;">
-- The Hustle Editorial Team
</p>
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7 years ago - news@thehustle.co
General Electric stock surges after the conglomerate gives its CEO the boot after 14 months. The ...