Aug 02, 2005This article was originally published by RFID Update.
August 2, 2005—Wall Street was abuzz yesterday with news that Symbol Technologies CEO William Nuti was quitting his job there to take the role of president and CEO at NCR, the Dayton, Ohio, maker of ATM, data warehousing, and retail-checkout systems. Nuti's departure is the second to occur from the upper echelons of Symbol management in only two weeks; on July 15th, the company's CFO Mark Greenquist resigned "to pursue other career interests." Yesterday's announcement was made worse by the simultaneously released news that the company lost $30 million last quarter. Symbol's stock price plunged more than 10% to $9.85, and Forbes declared "Symbol In Shambles". The stock is down almost 50% from six months ago.
Bill Nuti arrived at Symbol in 2002 as a young and accomplished technology executive with a resume that included management positions at Cisco, IBM, and Netrix. He was brought in to the role of president and chief operating officer at a time of crisis for the bar code maker, which was suffering from a half-decade of losses and accounting fraud investigations from federal authorities. In 2003, as the accounting scandal heat increased, then-CEO Tomo Razmilovic quit and returned to Sweden, and Nuti took the helm. He began an aggressive turnaround for Symbol, which included addressing the accounting scandal (the company subsequently revised down past revenue and net income statements), replacing the entire board of directors and a sizable chunk of senior management, increasing sales, and returning the company to profitability. Symbol's stock price climbed handsomely from $8.50 when Nuti started to a peak of $18.35 earlier this year, and Nuti's stint was tentatively considered a successful turnaround story.
It was also on Nuti's watch that Symbol executed the largest RFID industry acquisition to date when it scooped up RFID hardware manufacturer Matrics last September for a whopping $230 million. Until that point, Symbol was an also-ran in the RFID industry, which was curious since RFID was clearly the direction in which the company needed to expand its data capture bread-and-butter. While most observers considered the price tag too high, they acknowledge that acquiring Matrics' products, clients, and intellectual property portfolio afforded Symbol a quick and forceful entrée into RFID.
The question now is whether Nuti's exit will have repercussions for the RFID industry and Symbol's plans therein. Probably not, says Kevin Starke, Senior Analyst at Weeden & Co. In the first place, Nuti didn't necessarily leave Symbol because he doubted the company's prospects. Moving to NCR was probably "much more about a personal opportunity than anything else," says Starke. "For an up and coming technology CEO, NCR is a great stepping stone on the path the CEO-dom." (Keep in mind, it was NCR's previous chief that went on to fill Carly Fiorna's shoes at Hewlett Packard a few months ago.) To suggest that RFID played a role in Nuti's decision is a stretch. After all, it's not like he is leaving the industry; NCR, while not a market leader like Symbol, has a number of RFID initiatives underway.
Perhaps the only effect, if any, yesterday's news will have on the RFID industry is how well Symbol pulls out of its current funk. Leaderless and losing money, the company may be more vulnerable than ever, which rivals could exploit to chip away at its market share. More intriguing still is an observation (reg. req'd) by David Katz of Matrix Asset Advisors that was reported by BusinessWeek: the company's stock price has taken a beating to the point where it is probably undervalued, making the company itself an attractive acquisition target for a mobile computing or wireless giant. That observation, by the way, was made before the Nuti defection was announced.
