SAN FRANCISCO: For many companies, having a gregarious CEO can mean lots of positive press. That certainly was the case for CRM company Salesforce.com.
Chairman and CEO Marc Benioff's media noise during the quiet period has gotten the company's IPO, originally scheduled for mid-May, postponed. The offering will probably occur sometime this month, according to a news story on CNET.
Benioff is an outspoken and charismatic leader who has done a good job of promoting his company and generating brand awareness, said Steve Bonadio, VP with the Meta Group, an analyst firm. "But his mouth has finally landed him in trouble."
The IPO has been postponed because of a May New York Times article about the company, a story the SEC claimed violated its rules on a company hyping itself during the so-called quiet period before an IPO.
The article recalled a joke from the dot-com boom days: Salesforce.com would never go public because Benioff wouldn't be able to keep quiet.
But for the story, which only quotes Benioff saying he can't say anything, a Times reporter was allowed to follow Benioff for a day. So while the CEO technically doesn't say anything, the reporter and others do it for him.
"The board of directors should have taken steps to muzzle him," said Bonadio.
Salesforce.com and its agency, OutCast Communications, declined to comment.
While Chris Selland, VP of sell-side research at the Aberdeen Group, finds Benioff's demeanor refreshing, he said the company should have been more cautious - especially in the current financial environment, with the SEC scrutinizing companies like a hawk.
"[All] they can do now is be completely silent," said Bonadio. "No press releases. Nothing."
He added that he wouldn't be surprised if fallout from the story and postponed IPO has a negative effect on the IPO's value.