Sallie Shares Tumble After Lord's Tense Call With Investors

CEO Albert Lord said Sallie Mae needs to get into "growth mode."

"My bank sold me out on Friday," he said. "I will mention that it's embarrassing and troublesome to me personally. It is not a sign of my disillusionment with the company. In fact, the exact reverse is the case. It's a short-term cost in my view of my own belief in my company. I suppose you might say, one more victim of an unfinished deal."

Noting that there has been "a lot of finger-pointing about who was responsible" for the buyout's failure, Lord said that to blame him or Sallie Mae's directors, "you actually must believe that the other side wanted to do a deal and we did not. The exact reverse is the fact."

There was no talk yesterday of arranging another buyout. Instead, Lord said Sallie Mae had to "get out of deal mode and into the growth mode." Among his goals: strengthening Sallie Mae's balance sheet and improving its damaged credit rating.

The call got tense when William Kavaler, a managing director of the French bank Societe Generale, pressed Lord repeatedly for insights about the interest in securities backed by Sallie Mae loans.

"We're trying to figure out what your stock is going to be worth, and you've got to give us some guidance, you've got to give us some numbers," Kavaler said.

"You should give Steve a call," Lord said, in an apparent reference to the head of investor relations, Steven J. McGarry, who was also on the call.

"But you're the CEO. You're the guy who just took over the company," Kavaler said.

"Yeah, I'm the, that's exactly right. I'm the CEO. You should give Steve a call. Next question."

Lord said he would be prepared to take all questions in January, when he plans to address investors in New York.

"And I would suggest maybe you get there early, because I can assure you, you will be going through a metal detector," he said, in what seemed a facetious reference to the hostility he expects.

After only half the time allotted for the conference call, and after only four of the about 400 people listening to the call had asked questions, the operator asked for more. There was a pause.

"How good is this?" Lord said, in an apparent aside that could be heard on the call.

"Steve, let's go. No questions. Let's get the [expletive] out of here," he said.

Then, speaking to shareholders, Lord said, "Goodbye. Thank you."