My first reaction to the news on Thursday thatGoogle(GOOG-commentary-Trade Now) co-founder Larry Page would be taking over as the CEO from Eric Schmidt starting April 1 was that it was a negative for the stock in the short term.
This was counter to the initial jump in the stock in the response to the strong quarterly results. The stock initially bounced from $626 at the close of Thursday to $644 about 45 minutes after the news broke about Schmidt's departure from the top job. Those who were bullish on the stock were making the case that a strong company trumps the importance of the CEO.
Although I agree with the power of a group over any one individual or leader, a CEO carries significant weight for investors when looking at a public company. Although Google is a known company -- now public for over six years -- the price action in Google on Friday suggested that people are nervous about Larry Page's ascension.
If you sold your Google stock immediately at the open on Friday, you got $640 for the stock. It immediately dropped below that and didn't stop all day. It closed below $612 by the time Friday's session was over.
What does the market have to fear from Page leading the company? The hundreds of profiles about him describe him immediately as "smart." They say that "he's always been interested in the business" -- that's supposed to be a selling point? They say that he's driven and that he has always admiredApple(AAPL-commentary-Trade Now) co-founder Steve Jobs. And Schmidt and former IPO banker and Google employee Lise Buyer have gone out of their way to say that this succession has always been planned and that Page was always slated to take the top job.
I don't know Larry Page, haven't met him and have barely ever heard him speak, aside from his brief comments on Thursday's earnings call. (Is it unreasonable to expect that the new head of a $200 billion company would stick around longer than 10 minutes to answer questions, including the bland comment, "I'm incredibly excited about the possibilities to come"?)
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