Cramer's Wall of Shame: The New Inductees
Today, Cramer’s clearing out the Wall of Shame. Some members performed their way back into his good graces. Other CEOs earned a place on the wall.
George Buckley of 3M is doing a good job these days, so he’s off the list. But Chuck Prince of Citigroup, Vincent Solitto of Syntax-Brillian , Lee Scott of Wal-Mart and Mike Cherkasky of Marsh & McLennan are staying put. Cherkasky was on probation, but his stock is down, which is a definite way to spend the rest of his tenure on the Wall of Shame. He did clean up the company after the Spitzer bid-rigging scandal, but it’s time to take a broom to the CEO suite, Cramer said.
So who are the new inductees? Patricia Russo is one. Cramer called her the “terrible CEO of the terrible Lucent” before she became the CEO of the possibly worse Alcatel-Lucent back on Dec. 1. That merger just isn’t going as smoothly as it should apparently, and Cramer thinks the company needs new blood. His prediction: ALU should see $16 the second Russo leaves.
Ed Zander of Motorola also made the cut, which is a shame because he was doing well for a while there. Zander almost doubled the stock to $26 from $13.50 when he took over in early 2004. MOT is treading water at $17 now, though. Zander's big mistake: He made the RAZR cell phone a loss leader to gain market share, perhaps one of the dumbest things any cell phone manufacturer has ever done, Cramer said. Cell phone models have limited lives, so it’s imperative that companies make them as profitable as possible – not sell them for a pittance just to get your name out there. What’s worse, Motorola still doesn’t have a replacement for its super-cool handset.
Last up is Hector Ruiz of Advanced Micro Devices . He’s another CEO who brought his stock up nicely only to have it sink back down again. AMD went from $11 to the low $40s, but now it’s at $14 and change. The only reason Cramer likes the stock is because he thinks it goes higher if Ruiz loses his job. Hands down, Intel is the better company, Cramer said. AMD needs to do what Intel did in 2005 – switch out its businessman CEO for an engineer. When that happens, Cramer thinks AMD’s stock should bounce back.
Bottom Line: Cramer knows the Wall of Shame works, and now it has three new members AMD, MOT and ALU. Cramer expects their CEOs to go, and when they do, the stocks should move.
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