On my list for a slamming today is super-hyped cloud play Snowflake (SNOW).
So I was driving home last night and heard Snowflake’s CEO Frank Slootman — a mega gazillionaire who loves sailing yachts but is also a master at building tech businesses — doing an interview with a YF competitor. On with him is someone I never heard of before, Sridhar Ramaswamy, who was being described as the incoming CEO of Snowflake.
My first reaction was, “Wait — how did I miss this tonight, and why was I paying so much attention to Salesforce’s earnings?”
I slammed the brakes on my new car and pulled off from the busy highway to watch the interview (yes, for real), where I found two smiling execs yucking it up with the host. The host suggested Slootman signaled strongly to him in a not-so-distant past conversation that he was going to step down.
Memo to Frank and to the entire Snowflake board: You did a terrible job signaling this was coming in any form. And now the average investor (who doesn’t have access to Frank Slootman) is left holding the bag on a super-hyped tech stock — shares are crashing more than 23% as of this writing.
The Street was generally shocked here.
“Snowflake surprised investors on a number of fronts last night: its tremendously successful CEO is retiring effective immediately after he said he wasn’t going anywhere just 7 months ago,” Guggenheim analyst John Difuci wrote in a client note.
Stifel analyst Brad Reback also called Slootman’s exit a “surprise.”
Bottom line: CEOs have a responsibility to signal when they may no longer want the top job, either because they are burned out, want to play golf, or are keen on buying another yacht. And it’s the board’s job to ensure this process is handled first-rate, from external communications to internal communications.
If it isn’t handled right, you could get Slootmanned, excuse me, and experience a sharp stock sell-off because of a surprise shift in the C-suite.
