Is Best Buy the New Hewlett-Packard?
The consumer electronics giant has been struggling lately. No CEO should ever feel safe under that kind of scenario.
Best Buy changed its tune later in the day, conceding that this seemingly amicable "mutual agreement" to part ways was actually personal in nature. Well, we're starting to learn why. Star Tribune -- the Minnesota newspaper in Best Buy's home state -- is alleging that Dunn "used company resources to carry out an inappropriate relationship with a female employee."
This is starting to seem a lot like Mark Hurd's ouster at Hewlett-Packard (NYS: HPQ) two summers ago, as accusations by the company of using company resources to impress an underling -- in this case a contractor -- led to his departure.
In retrospect, Hurd's situation was more surreal. HP turned around under his watch, and he was quickly snapped up by Oracle's (NAS: ORCL) Larry Ellison. HP's scandalous loss was a meaty gain for Larry Ellison's enterprise software empire.
Dunn may have a harder time catching on elsewhere, even if the newspaper's allegations prove baseless. Yes, at this time it's all alleged and unnamed sources talking in the Best Buy case. The real story will probably come out in time, even though Hurd's story at HP still has more than a few unanswered questions.
However, let's not assume that it will be any easier for Best Buy to find a new helmsman.
The company is already closing down stores and laying off employees. The loss of market share to Amazon.com (NAS: AMZN) and the migration to digital delivery (something that Amazon is also championing) seem irreversible. Would you want to tarnish your reputation as the CEO who sank with Best Buy's ship? It's already taking on water.
Let's also get to the way the board handled Dunn's departure. The board may not have actually lied to investors, but it certainly misled them by waiting several hours to introduce the real nature of the decision. Who would want to work for a board like that?
This corporate soap opera still has a few chapters left before it plays itself out.
Best Buy is not what its name suggests
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At the time this article was published The Motley Fool owns shares of Amazon.com, Oracle, and Best Buy.Motley Fool newsletter serviceshave recommended buying shares of Amazon.com. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.