Here's a picture of HP Stock price from Aug 4, 1999 through July 30 2004
These are not exactly the comparison dates that the Fortune, Forbes, New York Times, FoxNews, and Jeffrey Soonenfeld are using, but it serves to make a point, which is -- when do you start the clock on Carly? One question of course is WHAT DATES ARE THEY USING, since they get somewhat different answers than I do.
END DATE and impact: We know the end date = February 7, 2005. And for that, we know the Friday closing on 2/4/05 of $20.45/share for HP, and the following Friday of $21.30. So the endpoint is pretty well established. And firing Carly on Monday did bounce the stock UPWARD -- 10% according to Jeffrey, ending the day up 7%. Here we see that by the end of the week, it was just 4.1%. And the S and P 500 didn't move at all. On the other hand, next-door analogous neighbors Intel and Agilent moved UP 5.4% for that same week. and neither of them fired their local CEO, or reported any 'new news." So, I'd conclude that Jeffrey and team are using a bogus criteria on this one. We'll compare this in a later post with other Silicon Valley denizens.
START DATE and impact: Carly's start date at HP was July 19, 1999. Forbes and Fortune seem to be using July 1, 1999 for some reason, and Jeffrey has used two different comparisons viz the S/P 500, one is a 47% drop for Carly vs. 7.2% for S/P 500; the other is a 52% drop for Carly vs. 15%.
We know the ending S/P number is 1204, so it either is 1297 or 1416 on some date in 1999 or 2000 for his calculations.
Voila--July 16 Friday close for the S/P 500 was 1416, but this yields that HP stock did far worse, down 63% instead of Jeffrey's claimed 52% for her full tenure. You'd think he'd want to use it all; maybe he just slipped a digit in the simple arithmetic.
June 11, 1999, the S/P 500 was 1293, which gives a drop of 47% for HP shares, 7.2% for S/P. Maybe this is the date they're using??? If so, why? And does it make a difference? Well, the difference in starting point between June 11 and July 16 for HP stock price was $44.19 vs. $57.00. Many shareholders would like that 29.0% gain in five weeks.
Either way, the basic claim being made is certainly more-or-less correct. The S and P 500 did go down modestly during Carly's reign at HP; HP shares fell in half or more. So, she's guilty as rain, and Sonnenfeld's claims in print and on TV are essentially accurate.
But, they're mostly irrelevant. If Sonnenfeld doesn't know that, it'd be sophomoric, but almost excusable. But his specialty at Yale, and in his eight books, is claimed to be knowing how to correlate and track CEO performance. So he MUST know he's cheating. The comparison has to be between comparable situations, not between apples and oranges.
He kinda showed his colors on this on TV last night--opting to say Carly uses "selective" companies such as Cisco and Intel to make her comparisons. He offers that he'd use Google (which didn't go public until her last six months; so we could use Yahoo), Xerox (who didn't have a dog in the hunt, but Corning Glass did, and so did Motorola); and Facebook which didn't exist period, and became a company three years after Carly was fired, and went public only in 2012. He also said Dell, a curious choice since Carly's reputedly dumbest move was to buy Compaq, and with it, she and then Hurd whipped Dell badly.
So, I will show some apt comparisons in subsequent posts.
I do this not because I am a Carly fan for the Presidency, but simply because factual history should have a place in our society, especially at institutions as reputedly ethical as Yale.