Cramer Says IBM's Palmisano Needs To Go

ON CNBC’s MAD MONEY, Cramer went over his SELL BLOCK where he reviews stocks that are usually supposed to be sold.

He is singling out one name.  IBM’s (IBM) Palmisano is one CEO that would take his stock up if he would just resign.  Cramer is replacing Palmisano on his 5 CEO’s that need to go, and putting him there instead of Andrea Junjg of Avon (AVP).  On March 1, 2002 when he took over IBM was north of $102 and despite the stock coming up 25% off lows the stock is still under after a 40% gain in S&P 500 after dividends.  He thinks the CEO is overpaid.  Cramer said that Google (GOOG) Apps at $49 is not as good as Microsoft’s or IBM’s but it is cheap enough and getting some corporate accounts.  Cramer thinks that IBM is a SELL while its current CEO is at the helm.  Infosys (INFY) has gained more than 200% during the same time.  IBM fell 0.5% on this after-hours.

While I have my own list of 10 CEO’s That Need To Go (4 have now fallen since December when I posted it), this one is not as bad.  We haven’t gone out and attacked CEO’s that merely have not led the shareholders to gains or that we feel are just overpaid or have only underperformed.  We go out after the ones that have made horrific errors or that have been so inept that the company cannot win with them.  Yes IBM holders probably wish they were up more, but he hasn’t murdered the company.  It may be true that if Palmisano stepped down that the shares would jump, but he hasn’t led the company into the toilet bowl as bad as Cramer is calling it.

Jon C. Ogg
February 22, 2007