It can't be a good thing when a CEO resigns without even the pretense of "spending more time with his family." Sprint-Nextel Corporation (NYSE: S) CEO Gary Forsee has been the focus of investor and analyst anger for some time now; on Friday, the Wall Street Journal reported Sprint management was searching for his replacement and recently, he was targeted by activist investor Ralph Whitworth. In September, Eric Buscemi wondered if his time had run out thanks to his Failure to Turnaround. A whole year following the company's purchase of Nextel, integration was still questionable and EBITDA was forecasted to be billions lower than expected.

According to a statement from Sprint, CFO Paul Saleh will serve as interim CEO while the board finds (finishes finding?) a new CEO. Interestingly, Sprint says it is targeting candidates outside the company. And in what seems to be a "might as well dish all our dirt at once" move, Sprint said it was forecasting a third-quarter net loss of 337,000 post-paid subscribers (the ones who have annual contracts and pay their bills each month).

The news was already cheering up investors; after a nasty drop of 51 cents, or 2.68%, to $18.50 on the day, the stock was up in after-hours trading to $19.05; erasing all the day's losses and then some. The company's stock is near a two-year low.

Sprint Nextel (NYSE: S) operates a wireless and wireline network servicing 54 million customers, closed at $19.28.

• The Wall Street Journal reported that S board of directors started a search in August to replace current CEO Gary Forsee.
  
• Alex Brown says: "We continue to believe that any change in leadership at this point will lead to yet another year or more of attempting to turn the company around."
  
• S November option implied volatility of 39 is above its 26-week average of 31 according to Track Data, suggesting larger risk.

Sears Holding (NASDAQ: SHLD) closed at $141.40.

• The WSJ says: "Activist investor Ralph Whitworth "has reportedly taken a 5 million-share stake in SHLD, which would amount to 3.5% of the retailer's outstanding shares."
  
• SHLD November option implied volatility of 38 is above its 26-week average of 31 according to Track Data, suggesting larger risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Anyone who reads my posts on BloggingStocks knows that I have lot of respect and admiration for that much-maligned group of people known as activist hedge fund mangers. The other day, I discussed a recent study that indicates that these investors are good for small shareholders. This week's issue of Barron's features an interesting piece on Ralph Whitworth and his fund Relational Investors, who played a key role in the ousting of Robert Nardelli from the Home Depot Co. (NYSE:HD). (On a side note, it may not have been quite as tough as it sounds. A $210 million severance package? Boy, they sure showed Nardelli who's boss). The piece also featured a prescient quote from Adam Smith, the 18th century philosopher/economist best known for writing The Wealth of Nations:

"The trade of a joint stock company is always managed by a court of directors...It cannot well be expected that they would watch over it with same anxious vigilance with which the the partners in a private copartnery frequently watch over their own...Negligence and waste, therefore, must always prevail, more or less, in the management of the affairs of such a company."