Monday's Worst Stocks in the World

Bad days. We all have them; some of us deserve them. Here are five stocks whose naughty ways drew investors' scorn on Monday:


Closing Price

CAPS Rating (out of 5)

% Change

52-Week Range

Deerfield Capital (NYSE: DFR  )





Stereotaxis (Nasdaq: STXS  )





IndyMac Bancorp (NYSE: IMB  )





Genesco (NYSE: GCO  )





Limelight Networks (Nasdaq: LLNW  )





Sources: The Wall Street Journal, Yahoo! Finance, Motley Fool CAPS.

Well, OK, we can't exactly call these stocks naughty. There are days when five-star winners and newsletter recommendations appear here.

But if you're an investor, you'll have plenty of bad days. The trick is to avoid dating -- or, worse, marrying -- your losers. That's why I listen when our 85,000-person-strong Motley Fool CAPS community of stock pickers speaks with a poor rating or a negative pitch. You should, too. Here's today's list of the worst stocks in the world.

We begin with Limelight Networks, which last week was ordered to pay $46 million in damages to Akamai (Nasdaq: AKAM  ) for patent infringement.

At issue in the case: whether Limelight's system for delivering Web content -- notably audio and video -- to customers such as Microsoft, Amazon, and Facebook is too similar to the approach Akamai patented in 1999. The answer appears to be "yes."

Limelight says it will appeal the decision. Akamai says it will seek a permanent injunction. My take? Watch the newswires for a settlement. Or, better yet, an acquisition. (It's happened before.)

Next up is Genesco, which agreed to stop pestering Finish Line and UBS (NYSE: UBS  ) for a deal.

But the payoff is meager. What was to be a $1.5 billion acquisition of Genesco by Finish Line will be settled for $175 million in cash and a 12% stake in the common shares of Finish Line, which will be distributed to Genesco shareholders.

In short, what was a bad business before will, as of Friday, be a bad business with $175 million more in cash. Yuck.

But our winner is IndyMac Bancorp, whose CEO, Michael Perry, secured a sweetheart deal for himself as his executive team took pay cuts.

Quoting from Perry's employment agreement, which was included in IndyMac's 10-K:

"Base Salary. During the Employment Term, Employer shall pay to [Perry] a base salary at the annual rate of $1,000,000 (the 'Base Salary'). At the sole discretion of the Compensation Committee, the Base Salary may be increased from time to time but shall not be reduced." [Emphasis added.]

History shows this to be a long-standing policy. Perry has been paid $1 million in base salary every year since 2005, according to the latest proxy statement.

But, also according to the 10-K, several of IndyMac's other top executives -- including Blair Abernathy, Ashwin Adarkar, Scott Keys, and Frank Sillman -- took 5% reductions from their effective salaries as of Jan. 29, 2008.

My guess is that mainline employees are also suffering pay cuts. Perhaps far deeper pay cuts?

IndyMac and its let-someone-else-suffer-for-my-missteps CEO ... Monday's Worst Stock in the CAPS world.

Do you agree? Disagree? Let us know what you think by signing up for CAPS today. It's 100% free to participate.

I'll be back tomorrow with more stock horror stories.

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10/27/2016 4:00 PM
AKAM $68.81 Up +1.11 +1.64%
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