Tuesday'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 Tuesday:

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

Naughty?
Well, OK, we can't exactly call these stocks naughty. There are days when five-star winners and newsletter recommendations appear here. Today, sadly, is one of those days.

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 110,000-person-strong Motley Fool CAPS community of stock pickers speaks with a poor rating or a negative pitch. You should, too.

Thus, here is today's list of the worst stocks in the world.

Worse
We begin with InterDigital, a Stock Advisor selection that makes our list because of a setback in its patent dispute with Samsung.

Specifically, a staff report from the International Trade Commission recommended against banning shipments of Samsung handsets to the U.S. InterDigital had asked for the ban to enforce five patents it believes Samsung is violating.

The case isn't over, though. A judge overseeing the complaint isn't bound by the staff report, as Foolish colleague Jim Mueller explained on the newsletter's discussion boards. "There's one week remaining in collecting and presenting evidence to the judge," Jim wrote. "Then he has until Nov. 25 to rule and then the ITC has until Mar. 25, 2009 (next spring) to make a final determination."

Still, the risk-reward equation upon which InterDigital's investing thesis was based is less attractive today than it was last week.

Worser
Next up is EMC, which torpedoed Rule Breakers recommendation VMware (NYSE:VMW) when executives there apparently decided to replace co-founder Diane Greene with a former Microsoft executive.

"Apparently" is the key word in that sentence. We don't know that EMC fired Greene. All we know is that VMware's new revenue outlook for 2008 is lower than Wall Street expected.

Trouble is, neither EMC nor VMware say why Greene left the company "effective immediately," as the press release reports. But we know it's a bad sign; EMC still owns 86% of the company and 98% of its voting rights (Intel and Cisco (NASDAQ:CSCO) together hold 4% of the shares).

That's not all. VMware accounted for roughly 15% of EMC's first-quarter non-GAAP earnings, according to a company filing. Revenue improved 73% over the first quarter -- far better than the 6% gain EMC's own storage software unit reported.

Seeing those numbers makes me think that Greene was fired. After all, EMC -- dependent as it is on acquired growth -- couldn't have liked that Greene wanted VMware to be spun off into a completely independent entity, as press reports say.

Worst
But our winner is Office Depot, which said that its second-quarter comps declined close to 10% because of the lousy economy. Margins fell at least four percentage points, and Standard & Poor's says it may downgrade the retailer's debt.

Oh goody.

We've known for months that Office Depot was in a tough spot. Management had said that troubled areas such as Florida and California contributed heavily to growth. Now, because of $4 gas, among other things, there's no growth left to grab.

Office Depot and hole-punched performance ... Tuesday's Worst Stock in the CAPS world.

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