Wall Street has responded favorably to Yahoo's decision to fire CEO Carol Bartz.
The company's shares opened up to nearly $14 per share today in the first moments of trading on the Nasdaq following Bartz's ouster. Following strong gains, Yahoo's shares have, at the time of this writing, started to subside a bit, leveling off at about $13.58, representing a more than 5 percent gain compared to their opening price of $12.91.
Word of Bartz's firing was first made public yesterday. In a note to Yahoo employees, Bartz said that she had been "fired over the phone by Yahoo's chairman of the board," Roy Bostock. Following that, Yahoo issued a statement on the matter, saying that the move was designed to improve the company's standing in the online marketplace.
"The Board sees enormous growth opportunities on which Yahoo! can capitalize, and our primary objective is to leverage the Company's leadership and current business assets and platforms to execute against these opportunities," Bostock said in a statement. "We have talented teams and tremendous resources behind them and intend to return the Company to a path of robust growth and industry-leading innovation. We are committed to exploring and evaluating possibilities and opportunities that will put Yahoo! on a trajectory for growth and innovation and deliver value to shareholders."
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Receiving that value is something that shareholders had been especially concerned about during Bartz's tenure as CEO. During the Yahoo annual shareholder meeting in June, one investor took aim at Bartz, saying that she should be fired due to her inability to turn the company's stock around.
At the time, rumors were swirling that Yahoo was looking for a replacement for Bartz. However, during the meeting, Bostock said that the board "is very supportive of Carol and the management team." A Yahoo spokesperson told CNET following the meeting that Yahoo was not looking for a replacement at that time.
Even so, the writing appeared to be on the wall. Since Bartz joined Yahoo in 2009, the company's shares never hit $20--a level that it easily bested from 2004 through much of 2008. Over the last several months, the stock has been hit especially hard. Since early May when shares were up to over $18, they plummeted to a low of about $11 per share in August. In the past year alone, Yahoo shares are down 17.2 percent.
However, through it all, Yahoo has remained quite profitable. In 2010, the company generated a profit of $1.2 billion on revenue of $6.3 billion. In 2009, Bartz led Yahoo to a profit of $598 million on $6.5 billion in revenue. But she evidently lost the trust of investors and the board. And now, Yahoo is looking for a new CEO to hopefully address its issues.
For the moment, that responsibility is in the hands of Tim Morse, the company's interim CEO. However, Yahoo says that it has initiated a search to find a permanent replacement for Bartz.