A newly appointed CEO arrives at his office on his first day. He is surprised to find a nicely wrapped present sitting on his desk. He reads the card and discovers it if from the prior CEO of the company. As he unwraps the package he finds a hand written note and a beautiful hand carved mahogany box. The note explains that inside the box are three numbered envelopes. The enclosed envelops should be used in times of turmoil when the stock price of the company is underperforming. The envelopes could only be used once and they must be used in order, the note explained. The share price had been rising with the announcement of the new CEO, so shareholders were happy and the new CEO placed the box with the envelopes in the back of his closet and all but forgot about it.
Nine months later things are not going so well. The stock price has tanked and Wall Street has turned negative on the outlook for the company and the CEO is about to attend his first annual shareholders meeting with upset shareholders. The CEO remembers the mahogany box with the envelopes and decides now would be the time to use the first envelope. He opens the envelope and inside is simply a neatly typed card with “BLAME YOUR PREDECESSOR”. The new CEO realizes the brilliance of the statement and at the ASM the new CEO blames all the problems on the prior management of the company. The shareholders seem appeased, Wall Street is happy, and the share price rallies.
Several quarters pass. The stock price is back down in the doldrums and shareholders are unhappy. The CEO remembers the mahogany box with the envelopes and decides now would be the time to use the second envelope. He opens the envelope and inside is simply a neatly typed card with “BLAME THE ECONOMY (or weather if you are retailor or drilling conditions if you are an exploration company)”. The (not so) new CEO realizes the brilliance of the statement and at a road show to promote the company blames all the current problems and poor stock performance on the economy. The shareholders seem appeased, Wall Street is happy, and the share price rallies.
Several quarters pass. The stock market indices are at all-time highs, yet the stock price is back down in the doldrums and shareholders are really unhappy. The CEO remembers the mahogany box with the last envelope and decides now would be the time to use the third envelope. He opens the envelope and inside is simply a neatly typed card with “PREPARE THREE ENVELOPES”.
