Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. So let's look at five dumb financial events this week that may make your head spin.
1. This buyout offer has wheels, baby
The executives at Skechers
Skechers has spunk. It's making these overtures public just days after Heelys posted a 76% year-over-year decline in quarterly revenue. Even spunkier? How about shareholders who bid shares of Heelys past the $5.25 mark, as if this is going to become a bidding war or something? That's pretty stupid. Who's going to bid against Skechers for a faddish brand that's on its way to obsolescence? Like first-time Heelys skaters, silly speculators don't know how to put the brakes on once they get rolling.
2. Bon voyage, Vongo
Another movie-downloading service bites the celluloid dust, as Liberty Media's
As the handiwork of Liberty Media's Starz, Vongo had a cable-world pedigree. Then again, maybe that was never such a big deal. Look around to see how many of the original movie-downloading services started by movie studios or cable giants are still around. The crowd is thinning out.
Sorry to see you skedaddle, Vongo, but blame your parents. With a name like yours, maybe consumers mistook you for something like a grocery-delivery service.
3. Like another Whole in the head
Disappointed investors looked at last week's dreadful Whole Foods
In fairness, this kind of thing happens all of the time. This episode makes the cut for Dumb Moves because Whole Foods prides itself on getting folks to pay up for premium food products, and news like this could make shoppers hesitant about paying more for organic foodstuffs.
Remember when the worst of Whole Foods' problems was when CEO John Mackey posted on stock boards under the pseudonym of Rahodeb, an anagram of his wife's name, Deborah? Times change. I get the feeling that Rahodeb was actually the anagram of Bad Hero. Think about it. Get back to me.
4. Dumping Diller
Standard & Poor's is making another change to its S&P 500 index. The widely mimicked gauge will replace Barry Diller's new-media empire IAC
Diller's no dud. IAC is leaving because the company is being divided into five smaller specialized companies. The Dumb Move here is that the S&P is opting to replace a stock in the growing Internet space with one in financial services. Like most mutual fund families, Invesco isn't falling into the rut that lenders and tipsy investment bankers find themselves in these days, but it sure sends a laggardly message. Be careful, S&P 500: Keep snoozing like this, and you'll wake up to find that you've become the new Dow 30. Yes, that's a diss.
5. And Justice for all
Imagine you're a retailer with a struggling concept that you've nursed along since 1987, as well as a hot but smaller chain that you started four years ago. The new store is bucking the mall malaise with steady growth. What to do? If you're Tween Brands
This may seem like a smart move, but let's key in on Justice's appeal. Tween explains that Justice is experiencing runaway success in this penny-pinching environment by selling apparel and fashion accessories with price tags roughly 20% to 25% less than what shoppers find at Limited Too. In other words, the company is killing a 21-year-old store brand for the sake of a cyclical lull in the economy.
That's not so bright. Why didn't it just incorporate Justice-branded discount sections within its Limited Too stores? Concept makeovers aren't cheap. What becomes of Tween when fickle pre-teens move on and it finds itself as a one-trick pony? Yikes. They do say Justice is blind.
Let's beat the Dumb drum:
- Here are last week's dummies.
- And the previous week's dumb moves.
- Three week's ago, dumbness still prevailed.