It was a pleasure meeting with Jeff McCreary in Seoul. He is very outspoken and approachable. While I believe that the former CEO had planted some of the key seeds for IDT's future growth, what IDT might need in the next phase is someone like mcCreary, who could be a visible advocate, to raise the company profile.
Thanks for this update on the CEO shuffle at IDT--McCreary certainly puts a new face on the company. It will be interesting to see if the board chooses such a "cheerleader" as you put it, for their permanent CEO.
>> Sometimes CEO shuffle is needed for companies growth or for taking the company to next level.
There is always a reason to change CEOs. Steve Jobs was fired, Mark Hurd of HP was fired. Sometimes, the problem is not the CEO but the business! Have a brilliant guy, put him in a bad business, the bad business will win.
@goafrit, so muchagree. When it comes to CEO their personalities makes lot of difference in decisionmaking and where and how they wanth company and the employees to grow. Like the one who had done lotof engineering work will have a different approach than one with sales background. The age also matters.
For matured industries like our own, age could be an issue since most of the senior managers are old white men. But in new industries like web, app, mobile, age does not offer much advantage. When you read about a CEO in our industry, there is no need to guess - it must be a white old man.
Sometimes it's the workings of vulture activists who must dislodge the productive CEO who grew the company and install their hatchet guy who is willing to gut the company so they can harvest it for a quick loot.
Unfortunately, this is the case with IDT and other eviscerated hardware companies,Zicor and Actel come to mind. This really doesn't bode well for US semi industry.
This is rich, IDT's board engineered Dr. T's resignation? McCreary is part of the IDT board; the interim CEO voted out Dr. T so he can have a chance to become pernamnent CEO? And what qualifies this guy to be CEO? Has anyone noticed yet that he has not been part of TXN for the better part of a decade yet his CV makes it seem as if he was there yesterday. He's been self-employed and employed by Starboard since leaving TXN. Wonder why he was not able to get a CEO job after TXN? Ask TXN alum.
>> Unfortunately, this is the case with IDT and other eviscerated hardware companies,
The root cause is that Chinese competitors have helped us to understand that routers and swicthes and these expensive systems are not that expensive. They make these systems and sell them very cheaply. Until US firms can adapt in price, it will be hard to change the dynamics of the industry.
Mannerisms <<The new CEO at IDT is looking to improve financial performance. Jeff McCreary took over from Ted Tewksbury in August.
The hugely respected Tewksbury had initiated a turnaround at IDT, putting the company into new product programmes aimed at taking IDT further into the mobile internet, cloud computing and connectivity.
"Ted did a great job in injecting some new DNA into this company," says McCreary, "but were were spending a lot on R&D and not delivering great results and the company was vulnerable because the stock value was low." "The board thought we were vulnerable and had got distracted chasing new product ideas and were not delivering great financial results," says McCreary, adding, "IDT has divested itself of some businesses that were OK but needed money to develop."
In December 2011, Tewksbury told EW: "The biggest challenge is explaining to Wall Street, getting the analysts to understand that it does take time to turn around a company. Basically, in the semiconductor industry it takes about 3 to 5 years from the time that you define a product to the time you develop it, get it designed into customer systems, get it qualified, get it ramped up into early revenue, and then get it to peak revenue. Analysts and investors typically have a short attention span, so that's the biggest challenge. Right now, we're about 3 years into this 5-year turnaround. So, with that timeline constantly in mind, the next couple of years are going to be the most fruitful for the company in terms of revenue growth." The investors couldn't wait.>>
>> <The new CEO at IDT is looking to improve financial performance. Jeff McCreary took over from Ted Tewksbury in August.
Wish him good luck of course. Yet. my point remains that if you have a really good guy and put him in a really bad sector/business, most times the latter wins. Ask the Apple VP that moved to JC Penney and then out. Our industry is simply not a place you can come and play 4 quaters of magic, the supply chain is complicated. The cars that will be branded as 2015 have all the parts in Ford, Toyota, etc now. So, even if you come now, you have 3 years lead time for compete for new supplies.
Unfortunately, there doesn't seem to be a next level for IDT, consensus is, now it will be sold. McCreary is installed by Starboard Value which wants a lucrative quick exit by selling the company and its parts. That's probably the real reason that the CEO who made such great progress in turning around the company left.
@Junko: interesting story on this... many of us were curious in the Silicon Valley on the inside scoop on what lead to the CEO shuffle. Incidentally last week I was talking about this with a professional contact at PMC Sierra who is involved in integrating the former IDT PCI Express enterprise flash controller business who feels that it was a worthy acquisition to PMC Sierra.
IDT did make some headway in MEMS timing devices and I am glad to notice that it was retained.
@goafrit ST certainly is the leader now in MEMS overall revenue but Bosch Sensortec is closing that gap. But ST lacks MEMS products in timing devices. In one of the designs I had a chance to look at, IDT seems to have addressed some tough issues with controlling temperature-influenced effects in MEMS timing devices.
Not sure how someone could dismiss an overstuffed pipeline of unending new 'World's Best' and 'World's First' high-margin products; market leadership in dozens of markets NEW to IDT; breathrough Timing solutions; a world-class company culture and bus loads of world-class engineers as "a few key seeds" planted by the former CEO.
That is like saying Steve Jobs and Bill gates planted a few key seeds for computing.
This is a fluff marketing piece for the lucky McCreary who will be able to have a party everyday at work, walking around, visiting every employee and 'cheering' them on because all the diffcult hard work, all the work that really matters in turning around IDT and keeping it on track for the next decade has been done by Ted Tewksbury.
McCreary should thank his lucky star that he lucked into this strong CEO who built him a great company, now all he has to do is sit back, enjoy his life and take credit for all the good things to come for which he has done nothing to deserve.
McCreary showed very bad form. Instead of introducing his vision for a new IDT,he had little to say but for badmouthing the former CEO. If he's not ready to talk about what he will bring to the table, why do the interview? Sounds like he's given much more thought to trashing the former CEO than growing IDT.
@Junko: McCreary revealed that Tewksbury's resignation was engineered by the company's board, which had been dealing for months with a "noisy" shareholder unhappy with IDT's "cheap stocks."
I do wonder a bit who the "noisy shareholder" was, but the reason for Tewksbury's departure doesn't come as a big surprise. I think I've lost count of the number of such moves I've seen because a shareholder was unhappy with the price of the stock they held. One question is whether the market will agree with the reasoning, and the stock price will rise with Tewksbury gone. We probably won't know till the board picks who the non-interim CEO will be.
Another question is noisy shareholder's ultimate intent. The usual reason for unhappiness with the stock price is that you want to sell it for a bundle and reap capital gains, and you can't unload it at the price you would like. This can lead to pressure on the company to do things that are in the short-term interest of the shareholder, but may be damaging long term to the firm.
I wish McCreary luck. I suspect he and IDT will need it.
At first it made no sense. IDTI stats were consistently improving; things were looking up; 2014 was going to be great for IDTI; the stock doubled in 10months; it raced past 5-year high and continued to climb.
No Board in its right mind would push out a CEO when things are going this well.
It made no sense unless you factor in that the "noisy investor" has always been Starboard Value which bought 8% of IDT stock and got 2 board seats (one for McCreary) in 2012.
Starboard usually pushes out the CEO on day one, the fact that Tewksbury lasted more than a year meant he has the stuff to stand up to them against their efforts to dismantle IDTI.
Ultimately it's hard to fight a malignant power broker like Starboard and win. There are rumors that the Board was threatened by Starboard before the proxy period that it was them or Tewksbury and the directors chose themselves.
Who knows what's really true. One thing is definite.
Tewksbury is known in the industry as a builder of successful businesses. Starboard and all its lackeys are known for dismantling businesses.
You are right in saying that IDT will need all the luck it can get
<<a "noisy" shareholder unhappy with IDT's "cheap stocks.">>
A noisy shareholder? McCreary means the noisy Starboard Value for whom he carries water. Cheap stocks? Last year the stock was at $5, this year it trades at $9-10. Apparently growing the stock 200% is not good enough for this noisy shareholder. Let's see how high McCreary can push the stock.
This is horrorible news, IDT was in everyone's peripheral vision as an industry bright spot, a little pocket of happiness where excellence reigns, now it is in serious trouble. What is happening to our industry?
@isagosen<< IDT's board engineered Dr. T's resignation? McCreary is part of the IDT board; the interim CEO voted out Dr. T so he can have a chance to become pernamnent CEO? And what qualifies this guy to be CEO? >>
Quite reprehensible. I hope the permanent CEO is beter than this guy. IDT has been around for more than 30 years, few tech companies can boast that these days, it deserves to be led by someone who's not a self-serving back stabber.
@adamrowski <<McCreary should thank his lucky star that he lucked into this strong CEO who built him a great company, now all he has to do is sit back, enjoy his life and take credit for all the good things to come for which he has done nothing to deserve.>>
McCreary is thanking Dr. Ted by trashing him in public.
This is the difference between tech guys and imposters. Tech guys get there by working hard and being brilliant.
Imposters try to get there by blowing hot air and glad handing everyone. Of course McCreary is enjoying his live, he doesn't have to work hard, it's all done for him, least he could do is show some gratitude.
<<Another question is noisy shareholder's ultimate intent.>>
If you go to IDT's yahoo message board, you will find people who follow the company's development pretty closely agree almost unanimously that Starboard Vulture fund(the noisy 8% shareholder' aims to sell off IDT and its lucrative new businesses for a huge gain. Some posters insist Tewksbury refused to break up the company and was thus forced out. The bad guys won.
Wall Streets though loves divestiture. Everyone now is looking for the company to be sold and some speculate that the price target is $16. Shouldn't shock anyone that the stock is heading up even as DC 's craziness is scaring the markets.