Just 27 months after he was aggressively courted away from U.S. West, Knowling resigned, ending a fast and furious ride that left the company at suspicious odds with Wall Street and its share price in smoldering ruins. The cavalcade of failures underscores a trend that experts say was overdue. As long as stock prices continued to surge despite zero profits, negative earnings, and soaring losses, investor patience for profitability seemed infinite. The timeline from first warning to final exit is shrinking noticeably. But the current trend may simply be a return to normalcy, or, if nothing else, a natural extension of the frenetic Internet age.
Fast times call for fast-moving CEOs.
A closer look at the Covad story, critics say, reveals just cause for the change. First, while Covad's subscriber line count rose from 16,000 to more than 200,000 under Knowling's watch, and revenues increased, so, too, did net losses. But Knowling may well have been trying to follow a trend in his industry. The wholesale model was just not going to be sustainable over the long term. That put Covad in a bit of a pickle.