Amazon resignation rings quiet on Street
The departure of CFO Warren Jenson, who presided over the company's financial highs and lows, won't likely help or hurt the stock too much, some on Wall street say.
Though most analysts say the turnover in CFO position shouldn't knock Amazon off course, they are concerned, however, that the stock will be stuck in limbo while the company searches for Jenson's replacement.
"The CFO replacement process and transition period may be an overhang until resolved," Salomon Smith Barney analyst Lanny Baker said in a research note Wednesday.
However, one investment bank, RBC Capital Markets, downgraded the stock on news of Jenson's departure.
In early trading Wednesday, the stock slid below $15, down about 7 percent. But Amazon's share price rebounded, and closed the regular session up 36 cents, or more than 2 percent, at $16.33.
Jenson, 45, who has served as CFO since September 1999, presided over big deficits at Amazon but also helped draw up the blueprint for Amazon's successful campaign to reach profitability for the first time, which it did during its fourth quarter.
"I took this position with the objective of working with (CEO Jeff Bezos) and the management team to bring Amazon.com to profitability," Jenson said in a statement Tuesday. "While the decision to leave is a difficult one--it's the appropriate time for me to move on to a new set of challenges. I am grateful to Jeff and the entire Amazon.com family for a wonderful opportunity and experience."
In January, Amazon reported a net income of $5 million, or a penny a share.
Before coming to Amazon, Jenson had been chief financial officer at Delta Air Lines and had held the same post at General Electric's NBC before that.
Jenson was brought in as part of an executive team to help steer Amazon toward profitability by cutting costs, and to focus the direction of the Web superstore.
Before hiring Jenson, Amazon named Joseph Galli as president and chief operating officer and tapped Jeffrey Wilke to take over as vice president and general manager of operations. Galli left Amazon after 13 months to head up an online business-to-business exchange.
Bezos made a promise in the fall of 2000 that Amazon would finally reach profitability--on a basis that excluded certain charges--in the fourth quarter of 2001. Though Wall Street analysts were skeptical, the company posted fourth-quarter earnings that were much better than expected.
Jenson's departure, which comes as Amazon is planning what to do for an encore, could nick the company's stock a bit, said Safa Rashtchy, senior analyst for U.S. Bancorp Piper Jaffray.
"Whenever a CFO leaves, people begin to get nervous about a company," Rashtchy said. "But I don't see a major decline because of this."
Jenson will remain at Amazon for several months and assist the company in recruiting his successor. Company officials didn't say Tuesday when they will name a successor or if they have candidates. The company has hired an executive recruiter, sources close to the company said.
Rashtchy expects that Amazon will name a new CFO that isn't from the dot-com sector. He said Jenson's replacement doesn't necessarily need to come from the retail industry, "But it would be good if he were."
News.com's Troy Wolverton contributed to this report.