When legendary Broadcom (BRCM) CEO Henry Nicholas III stepped down in 2003, many wondered how the chipmaker would ever replace him. After co-founding the company in 1991, Nicholas built Broad-com into one of the largest makers of chips that power consumer-electronics and communications gear.
It took nearly two years, but on Oct. 26, Broadcom finally selected a permanent successor: Scott McGregor, 48, previously CEO of Philips Semiconductors (PHG). McGregor replaces interim chief Alan Ross.
McGregor joins Broadcom at a critical time. In the first nine months of this year, sales jumped 65%, to $1.9 billion, and it swung from a loss of $965.9 million to a profit of $152.7 million. But Broadcom is facing a slowdown in sales as it works through excess inventory. That puts pressure on McGregor to find new markets. And there's little doubt Nicholas will be looking over his shoulder: The ex-CEO owns enough shares to give him more than 30% of Broadcom's voting power.
Consumers may love bargains, but they sure shelled out for Shopping.com's (SHOP) initial public offering. On Oct. 26, the Web comparison-shopping site saw its stock jump 60%, to $28.80 a share, and it rose 10% the next day. It was the second attempt to go public this year by the Israel-based company, which postponed its offering in June when the IPO market slowed. But the phenomenal 114% rise of search engine Google's (GOOG) stock since its Aug. 19 IPO cleared the way for Shopping.com's stock market debut. It also seems to have persuaded investors to ignore a warning in Shopping.com's prospectus. Some investors in Epinions, an online product review company it bought last year, contend they were misled about growth and may seek damages of more than $70 million.
On Oct. 27, Blockbuster (BBI) President and Chief Operating Officer Nigel Travis unexpectedly announced he will leave the video-rental company by yearend. The same day, Blockbuster reported a third-quarter loss of $1.42 billion and warned fourth-quarter profits would "decline significantly" as it combats sales of cheap DVDs at retailers like Wal-Mart Stores (WMT) and the success of video-by-mail operators such as Netflix (NFLX). Travis was unavailable for comment, but Chairman and Chief Executive John Antioco attributed his departure to managerial ambition. After Antioco recently signed a new five-year employment contract, "the opportunity [Travis] wanted wasn't likely to occur here," Antioco says.
Midpriced department store chain J.C. Penney has again gone upscale for a new leader. On Oct. 27, Penney unexpectedly named Myron Ullman III chairman and CEO, effective Dec. 1. A 15-year retail veteran, Ullman, 57, most recently was a senior executive at luxury retailer LVMH Mo?t Hennessy Louis Vuitton. He will replace Allen Questrom, a former Barneys New York CEO who joined Penney in 2000 to spearhead a turnaround at the retailer. Questrom had said that he would stay at Penney for only five years. Industry observers had widely expected Vanessa Castagna, Penney's CEO of stores, catalog, and Internet, to succeed him.
The Securities & Exchange Commission approved a rule that brings the hedge-fund industry under its eye for the first time. On Oct. 26, the commission voted 3-2 to require hedge-fund managers to register with the SEC. The rule will let the agency inspect hedge funds' books and records. It also will force hedge funds to appoint compliance officers and raise the wealth threshold for investors in most of these private-equity pools to $1.5 million. Although about 40% of hedge-fund managers already have registered voluntarily with the SEC, the industry fought the rule. Now some managers, including Phillip Goldstein, who runs Opportunity Partners, plan to challenge the SEC's authority to regulate the industry.
-- ATA Airlines (ATAH) declared bankruptcy on Oct. 26.
-- Nortel delayed the release of its restated financial statement until November.
-- Boeing (BA) posted a 78% jump in quarterly earnings that beat Wall Street forecasts.
Madison Avenue got some good news on Oct. 26 as Omnicom (OMC) shares rose 9%, to $79.44. The ad agency holding company outdistanced Wall Street's estimates with a 17% gain in third-quarter earnings, thanks to a boost from Summer Olympics advertising.