On my list for today is the highly acclaimed cloud game Snowflake (SNOW).
So I'm driving home last night and I'm listening to Frank Slootman, CEO of Snowflake – a mega-gazillionaire who loves sailing yachts but is also a master at building tech companies – conducting an interview with a YF competitor. With him is someone I've never heard of before, Sridhar Ramaswamy. This person is described as Snowflake's new CEO.
My first reaction was, “Wait – how did I miss this tonight and why did I pay so much attention to Salesforce (CRM) earnings?”
I slam on the brakes of my new car and pull off the busy highway to watch the interview (yes, really), where I find two smiling executives chatting with the presenter. The moderator suggests that Slootman clearly signaled to him in a recent conversation that he was resigning.
Memo to Frank and the entire Snowflake board: They did a terrible job signaling that this would happen in some form. And now the average investor (who doesn't have access to Frank Slootman) is stuck with a highly touted tech stock – shares are plunging more than 23% as of this writing.
The street here was generally shocked.
“Snowflake surprised investors in several ways last night: Its wildly successful CEO is retiring effective immediately, after declaring just seven months ago that he wasn't going anywhere,” Guggenheim analyst John Diffuci said in a note to clients.
Stifel analyst Brad Reback also called Slootman's exit a “surprise.”
End effect: CEOs have a responsibility to signal when they may no longer want the top job, whether because they are burned out, want to play golf or want to buy another yacht. And it is the board's job to ensure that this process, from external communication to internal communication, is handled in a first-class manner.
If not handled properly, you could end up in a slootmanned attack – excuse me, a major stock sell-off due to a surprise shift in the C-suite.