Monday, July 02, 2007

'Hide and Go Seek' at Blue Nile

“One-Mississippi, two-Mississippi, three-Mississippi, four-Mississippi . . ."

Blue Nile Inc. (
NILE-$63.35) on Friday named Scott Devitt as chief financial officer, effective July 23.

Previously, Devitt served as managing director and senior analyst for the Internet Consumer Services division at financial services company Stifel Nicolaus & Co.

Pursuant to Mr. Devitt's offer letter, Mr. Devitt will receive a sign-on bonus of $200,000, an annual base salary of $200,000 and is eligible to receive a pro-rated target annual incentive bonus of $100,000 for fiscal year 2007.

"Ready or not, here I come!"

Devitt will now report to Diane Irvine, who previously served as Blue Nile's CFO since 1999.

Funny thing – Blue Nile was one of the e-Commerce companies covered by Devitt during his recent stint at Stifel Nicholas. On May 7, Devitt participated in the online jewelry retailer’s
first-quarter earnings call, asking President Diane Irvine pointed questions about product-mix and capital expenditures.

Are we the only ones who are thinking Devitt should have recused himself from the conference call because of a conflict of interest?

"Alley, alley, oxen free!"

Curious why investors—and research clients—of Stifel Nicolaus—do not seem to care how long the ‘bullish’ analyst was in negotiations with Blue Nile for the CFO position. A rising stock price hides all sins. Unless you are short the stock—like the 10Q Detective.


Anonymous said...

Do you think Devitt read your post and decided not to court with conflict of interest charges before he even joined the company?! :)

David J. Phillips said...

Despite the "wanting to spend more time with his family" excuse, I believe Devitt was (a) too young for the CFO position and (b) probably realized he was 'getting in over his head'--level of experience!!!!