On my picks list today is the highly touted cloud play Snowflake (SNOW).
So, on my drive home last night, I heard Snowflake CEO Frank Slootman (a billionaire who loves sailing yachts, but also a master at building technology businesses) interviewing YF's competitors. With him is someone I've never heard of before: Sridhar Ramaswamy. This person is said to be Snowflake's next CEO.
My first reaction was, “Wait, how did I miss tonight and why was I paying so much attention to Salesforce (CRM) earnings?”
I hit the brakes of my new car and pulled off the busy highway to watch the interview (yes, it's true). There, I found two executives smiling and chatting with the host. The host suggested that Mr. Slottman strongly communicated his intention to resign in a conversation in the not-too-distant past.
Memo to Frank and the entire Snowflake Board of Directors: You have done a terrible job of letting us know that this is coming in one form or another. And now the average investor (those without access to Frank Slootman) is left with a super-hyped tech stock on their hands — with the stock plummeting more than 23% as of this writing. There is.
Here the street was generally shocked.
“Snowflake surprised investors on a number of fronts last night, with the highly successful company's CEO saying just seven months ago that it wasn't going anywhere,” Guggenheim analyst John Defushi said in a note to clients. He effectively resigned from his position immediately afterward.”
Stifel analyst Brad Liback also called Slootman's departure “surprise.”
Conclusion: CEOs have a responsibility to let their employees know when they can no longer hold the top job, whether it's because they're burnt out, want to play golf, or want to buy another yacht. And it is the board's job to ensure that this process is handled at the highest level, from external to internal communications.
If not handled properly, it can lead to Slootmanned. Excuse me, but you have to experience a stock price plummeting due to a sudden change in top management.
