Former New Jersey Democratic Gov. Jon Corzine has more friends on Wall Street than he wound up with in the Garden State. Although the former Goldman Sachs (GS) co-chairman lost his bid for reelection in November to Republican Gov. Chris Christie, that hardly made him unemployable: He's now becoming chief executive of the struggling brokerage firm MF Global Holdings (MF), based in New York, which has reported four consecutive quarterly losses, The Wall Street Journal reported today.
Corzine succeeds Bernard W. Dan, who resigned as CEO and as a member of the board for what the company calls personal reasons. MF Global shares, up more than 90% over the past year, surged on the announcement, despite disappointing fiscal fourth-quarter revenue guidance of between $235 million and $245 million.
"Though we are surprised by current CEO Bernie Dan's departure. . . we consider Mr. Corzine's appointment as CEO and Chairman of MF a positive event for the company and the stock," wrote Keefe Bruyette and Woods analyst Niamh Alexander, who rates MF's shares as outperform, in a note to clients. "
We see many parallels between Mr. Corzine's tenure at Goldman Sachs, running its fixed income institutional business and then later, running the company (and MF Global)...Importantly, Mr. Corzine's vision for MF appears to be inline with the goals MF has been targeting."
A Bad Bet on Wheat
Corzine, who went into politics after losing a power struggle at Goldman Sachs, also was appointed an operating partner at J.C. Flowers & Co., the private equity firm that acquired a stake in MF Global for $300 million in equity in 2008 to help MF pay down debt resulting from unauthorized bets on wheat futures. Corzine will also be a lecturer at Princeton University.
Since losing the election, Corzine has hardly hidden from the media. He has been a frequent guest on CNBC and energetically denied rumors that he was in line to replace Kenneth Lewis as chief executive of Bank of America (BAC).
But for Corzine, another run at public office seems unlikely at this point. As governor, he failed to convince New Jersey voters that he could tackle the state's financial problems -- despite his decades of experience on Wall Street. Gov. Christie has more of a common touch and has proposed a budget that critics consider Draconian and that he himself calls painful. Whether Corzine or Christie will be more successful in their respective new jobs remains to be seen.