From Jim Metrock:
In 2014 Houghton Mifflin Harcourt (HMH) had a lot of people scratching their heads when they acquired the burned-out, remaining assets of Channel One News.
Only two years before, Houghton Mifflin emerged from an embarrassing bankruptcy.
Why did HMH acquire Channel One when this controversial youth marketing company had little chance of adding to Houghton Mifflin’s revenue? Yes, Channel One could cross promote other products for HMH such as young adult books, but surely other employees of HMH (who actually care about enlightening and educating young people) had to have been demoralized to share their company with Channel One’s band of misfits.
On August 4, Houghton Mifflin announced its second quarter results: Not good.
In short the company lost more money than analysts projected. The company also downwardly revised their yearly financial projection.
CEO Linda Zecher and her brand spanking new top financial executive Joe “Hey Abbott” Abbott sugarcoated the discouraging results and gave nonsensical non-answers to legitimate questions during the company’s conference call with analysts, Afterward Houghton Mifflin’s stock dropped dramatically – from $17-something to $15-something.
Linda Zecher is not turning out to be the post-bankruptcy leader the company had hoped. She was hired in 2011 as Houghton Mifflin was preparing to emerge from bankruptcy. Ms. Zecher describes herself, and this is no joke, as a “transformative leader, pragmatic strategist and methodical operator committed to leading high performance teams.” Whoa. Those big words would be impressive if Ms. Zecher could back them up with results.
During Ms. Zecher’s term at Houghton Mifflin the stock has peaked near $27. One year ago the company’s stock was $23.63. Today, August 9, it closed at $14.98, the lowest closing price since Ms. Zecher took command of the company.
As Houghton Mifflin continues to lose value, I believe the company will start making hard decisions. It may get to a point that that non-producing parts of the company need to be jettisoned. Channel One, and maybe Linda Zecher herself, need to be concerned.
