# The Impact of Boomerang CEOs on Company Shares
In the world of corporate leadership, there is a phenomenon known as the “boomerang CEO.” These are executives who return to lead a company for a second time after previously stepping down or being fired from the role. While this trend may seem surprising, it is not uncommon for companies to bring back former CEOs during times of crisis or when they want to eliminate onboarding time with a leader who is already familiar with the firm.
## The Case of Under Armour and Kevin Plank
Recently, shares of Under Armour (UAA) took a hit when founder Kevin Plank announced his return as Chief Executive Officer (CEO) on April 1, replacing Stephanie Linnartz. Analysts at Evercore ISI downgraded the stock, citing concerns about prior growth strategies not working and potential risks to the brand in the long term. This reaction from the market is not unique, as we have seen similar scenarios play out in other companies as well.
## Success Stories of Boomerang CEOs
While the performance of boomerang CEOs can vary, there have been some notable success stories in the past. One of the most famous examples is Steve Jobs, who returned to Apple (AAPL) in 1997 after being forced out in 1985. Jobs led Apple to become one of the largest and most influential companies globally, significantly impacting the stock price during his tenure.
Another example is Howard Schultz, who returned to lead Starbucks (SBUX) in 2008 after stepping down in 2000. Schultz’s return saw the share price climb significantly, showcasing the positive impact a boomerang CEO can have on a company’s performance.
## The Disney and Procter & Gamble Experience
Bob Iger’s return as CEO of The Walt Disney Co. (DIS) in 2022 came at a challenging time for the company due to the COVID-19 pandemic. While Disney shares initially took a hit, they have since partially recovered under Iger’s leadership.
A.G. Lafley’s experience at Procter & Gamble (PG) provides a different perspective on boomerang CEOs. Lafley’s first tenure saw significant success for the company, but his return in 2013 did not yield the same results. P&G experienced lackluster performance during Lafley’s second round as CEO, leading to a flat stock price over his two-year return.
## The Bottom Line
The concept of boomerang CEOs can be a double-edged sword for companies and their shareholders. While some executives have successfully turned around struggling businesses, others have failed to replicate their past achievements. Investors should carefully evaluate the circumstances surrounding a CEO’s return and consider the potential impact on the company’s performance and stock price.
In conclusion, the phenomenon of boomerang CEOs continues to intrigue and divide opinions within the business world. As companies navigate through challenges and opportunities, the decision to bring back a former leader can have far-reaching implications for their future success. It remains to be seen how Kevin Plank’s return to Under Armour will ultimately shape the company’s trajectory and shareholder value in the coming months and years.
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