Saturday, 12 November 2016

The Thing About Grubhub

One of the technology and food sector trend companies....Grubhub....had their stocks fall drastically yesterday.  Five-percent.  Cause?  Well....there on Wednesday, the CEO put out an employee email saying that if you voted for Trump.....you were probably not going in the direction of the company as an employee and you'd best leave.

That memo?  Well....it went public real-quick.

Yeah, it got GOP people aggravated and some vow never to use Grubhub ever again.

The CEO, Matt Maloney?  Well, he says that people mistake the way he worded the memo, that he just wanted a peaceful environment to exist within the the company.

Oddly, on the same day that he put this memo out....he sold 14.5 thousand shares of the company, for roughly $500,000. (Wiki info)

Did he calculate this and sell before the 5-percent drop?  Hard to say.  The CNBC crowd aren't really diving into this story.....maybe the Wall Street Journal will do a piece next week to detail out what was going on.

The thing here is that as a business enterprise.....doesn't matter if it's a six-man tire-sales shop, or a 3,000 man IT developmental company....you can't get into politics and expect to survive.  This trend, which I suspect started in the 1990s.....has reach an epidemic state.  Why these CEOs get this "stupid"?  I think there's a new group of CEO who came out of college in the 1980s and got dragged into some different way of thinking.

What will happen to Grubhub?  My guess is that they will find a ten to twenty percent drop in the customer base within three months.  Maloney will try to explain this to the board at some special 'quiet' meeting in April or May of 2017.

Maloney's explanation will be that it's all a temp-thing and recovery will be seen with new advertising.  Three or four of the board members won't buy into this suggestion.  By July of 2017....Maloney is sent off (let go).

What will happen next is some move by the board to acquire another similar company....fuse the two.....and rename Grubhub into something totally different.  The new CEO hired?  He or she will be told in a direct way that they are not to be political in any shape or form. They probably will even be told they are not to donate money to some candidate unless it's for their state or local town.

As for Maloney?  My bet is that he gets into politics in 2018 and runs for some office (maybe state legislature....maybe even some US Senator job).

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