Posted on 10/01/2004 8:50:42 AM PDT by harpu
TOO FUNNY for words...Arrogance (+ Ignorance) rewarded!!
PLEASANTON, Calif. - In a surprise move, business software maker PeopleSoft Inc. fired CEO Craig Conway on Friday, divorcing itself from the feisty leader who engineered the company's dogged resistance to a $7.7 billion takeover bid by rival Oracle Corp.
PeopleSoft's board replaced Conway with its chairman and founder David Duffield, who also is the largest shareholder. The board appointed chief financial officer Kevin Parker and Phil Wilmington, the company's top sales executive, as co-presidents.
PeopleSoft's board dumped Conway in a meeting late Thursday night, Skip Battle, a company director, told analysts during a Friday conference call.
"Over time, the board has become increasingly concerned with Craig's leadership," Battle said. "There is no smoking gun. It was a matter of the board losing confidence in Craig and when that happens a decision has to be made."
PeopleSoft announced Conway's ouster along with a pleasant surprise - the Pleasanton-based company revealed that its sales of new software licenses for the just-completed third quarter exceeded $150 million, much higher than analysts anticipated.
The decision to dump Conway after such a strong quarter raised questions about whether the shakeup is designed to set the stage for a more friendly deal with Oracle.
Conway, hired five years ago to replace Duffield as CEO, has been staunchly fighting to keep PeopleSoft out of Oracle's clutches for nearly 16 months.
Almost as soon as the company launched its hostile takeover attempt, Conway dug in his heels, describing the bid as "atrociously bad behavior" while lambasting Oracle CEO Larry Ellison as a sociopath.
Conway formerly worked under Ellison at Oracle, a dynamic that spiced the soap opera that has riveted Silicon Valley.
But Battle insisted Conway's firing had nothing to do with PeopleSoft's attitude toward Redwood Shores-based Oracle's $21-per-share bid.
Investors, though, appear to believe PeopleSoft is more likely to be sold with Conway out of the way.
PeopleSoft's shares surged $1.64, more than 8 percent, during Friday's trading to $21.49 on the Nasdaq Stock Market, where Oracle's shares climbed 55 cents, nearly 5 percent, to $11.83.
Oracle's bid received a major boost three weeks ago when a federal judge rejected an attempt to block the proposed deal for competitive reasons. That decision prompted many shareholders to begin pressuring PeopleSoft to open talks with Oracle, but Conway reiterated the company's determination to remain independent during a customer conference last week.
With Conway gone and the company coming off a surprisingly strong quarter, "many shareholders seem to believe PeopleSoft's board will now have the leverage to get a higher price," said American Technology Research analyst Donovan Gow.
But Gow still suspects Duffield, who founded PeopleSoft in 1987, might have reservations about selling to Oracle, his company's fiercest foe.
"PeopleSoft is Dave Duffield's baby," Gow said. "He may be just as adamant as Conway" about fending off Oracle.
Duffield has been in semiretirement, living in the Lake Tahoe area, since turning over the reigns to Conway in 1999, but he told analysts he is ready to get back to work.
"I'm here for the long term," Duffield said. "I'm totally energized. I think it's going to be a very fun exercise and good for shareholders."
Oracle has indicated it will fire more than half of PeopleSoft's 11,500 employees if it buys the company.
I don't know about all this, but one of the nicest "ding" letters I ever received was from PeopleSoft.
Wow. A guy helps the company beat Wall Street, fights off a hostile takeover that would have resulted in half the company's workforce being laid off, and gets canned for his trouble.
I guess it's true. No good deed goes unpunished.
It's about the stockholders not the workers. Whatever is best for the shareholders is the right thing to do.
Can you spell Microsoft?
I'll spell Oracle.
Last year in the same quarter, PSFT did $160.5 million in new licenses. For this quarter, analysts expected $140-$147 million (one analyst thought $95 million or so, he was just an idiot). So yes, PSFT is better than expected, but still lower than last year.
Of course, lots of ERP companies are having lower license sales. Look at Lawson in Minneapolis for instance. They're canning 6% of their workforce, or 100 people. (I wonder if Willie Green has already posted that).
We are currently undergoing a conversion to People Soft where I work. The university has spent A LOT of money on this, everything from software, to licenses, to the People Soft techs. We were told about Oracle trying to buy them out a while back. They made it sound like Oracle might simply do away with People Soft if that happened.
"PeopleSoft announced Conway's ouster along with a pleasant surprise - the Pleasanton-based company revealed that its sales of new software licenses for the just-completed third quarter exceeded $150 million, much higher than analysts anticipated."
What do the stockholders want, to lose money? Some folks are just too smart by half.
Microsoft is having enough problems trying to make Great Plains and the Danish company they bought (Navision) work right. Of course, MSFT was supposedly talking to SAP. That would've kept the business culture professors at business schools buy for years. Talk about a clash of cultures. That'd make DaimlerChrysler look like a perfect cultural fit.
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