GenOn Energy's Shares Got Crushed: What You Need to Know
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What: Up on Wall Street, the pink slips are a-flying. Apple's CEO departure grabbed all the headlines today, but Steve Jobs wasn't the only one taking a hike. Over at GenOn Energy (NYS: GEN) , shareholders just lost a COO -- and at one time they had also lost 11% worth of market cap.
So what: According to GenOn's press release, this is a simple "moving-on" announcement. Former COO Mark Jacobs had been CEO of RRI Energy, and became COO at GenOn when RRI Energy merged with Mirant in December 2010. Now that he's finished helping with the merger, it's time to move on.
Now what: Investors aren't buying it. GenOn's looking likely to be unprofitable this year, and expected to lose money again in 2012. Perhaps shareholders suspect Jacobs has become as disillusioned with the company as shareholders are with its stock. If that's the case, I can't say as I'd blame them. Electric utilities are supposed to be stable, profitable, dividend-paying businesses, after all. So far, GenOn is failing to fulfill any of those implied promises.
Maybe investors should take a cue from management, and move on from GenOn.
Disagree? Think GenOn's got a future?Add it to your Watchlist.
At the time this article was published Fool contributorRich Smithdoes not own (or short) either company named above. The Motley Fool has adisclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
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