Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. In the Flame of love
Burger King (NYSE: BKC ) seems tireless in finding new ways to get into this roundup. First it unleashed the questionable Whopper Virgin ads earlier this month. Now the world's second-largest burger chain is rolling out its burger-scented Flame cologne.
As much as I admire a company that doesn't take itself seriously and is willing to take marketing risks, there comes a point when edgy marketing, in the form of real products like Xbox games, ketchup-flavored potato chips, and now novelty fragrances, derails a brand.
Ronald McDonald is certainly creepy in his own right. But unlike the unsettling, plastic-headed King, he's never had to stoop to pitching Axe-like colognes while lying practically naked on a bearskin rug. Sorry, BK. I get the joke, but I think I just lost my appetite.
2. Kicking aft
You know what makes me sick? CEOs who stretch the truth. Then again, when we're talking about the helmsman of the world's largest cruise-ship operator, I guess I should make that "seasick."
"Achieving increased fourth quarter earnings is a significant accomplishment considering the challenging environment," Carnival (NYSE: CCL ) CEO Micky Arison notes in yesterday's quarterly report.
The cruise line posted a profit of $371 million for the quarter, just ahead of the $358 million it earned a year ago. However, the company also scored a $31 million gain in the sale of its Queen Elizabeth 2 ship during the period. In other words, it wasn't a "significant accomplishment" -- just a boat sale.
3. Grand theft autumn
When Take-Two Interactive (Nasdaq: TTWO ) urged shareholders to reject an unsolicited buyout bid for $25.74 a share from video game rival Electronic Arts (Nasdaq: ERTS ) , it assumed the company could provide a sweeter return for its investors.
Gee, $25.74 is starting to look pretty good now. Shares of Take-Two fell into the single digits yesterday after a bleak fiscal 2009 outlook. The company behind this year's Grand Theft Auto IV blockbuster is now looking to earn no more than $0.20 a share in its new fiscal year. Analysts figured the company would be good for $1.26 a share in adjusted profitability for the year.
Ouch! Do me a favor, publicly traded companies: Read the Microhoo manual. If you're going to turn down a buyout offer, at least make sure that you have something better to offer on your own.
4. The irony is in the name
Yahoo! (Nasdaq: YHOO ) is killing Kickstart, a social networking site for college students with a job-hunting bent that the dot-com giant launched earlier this year. Would-be users are being directed instead to the company's HotJobs.com job listings site. Wait, isn't that what the company is also doing with the roughly 1,500 or so employees it let go last week?
I'm kidding, of course. Yahoo! is doing more than that to get its displaced ex-Yahooligans employed elsewhere. However, why isn't Yahoo! more patient with its social-networking sites? This is the second such site Yahoo! has killed within a year of its launch, after it smashed Mash this summer.
I get it. If a site isn't performing as expected, snuff it out quickly. However, if Yahoo! used the same approach with its CEOs, do you think that Terry Semel and Jerry Yang would have lasted as long as they did? No way. Spinal Tap drummers would last longer.
5. Ay, ay, iPhone
If you can't beat 'em, app 'em. There's a new free program in Apple's (Nasdaq: AAPL ) App Store for iPod and iPod touch users, and it's the handiwork of Microsoft (Nasdaq: MSFT ) . Seadragon Mobile lets users swiftly browse through a growing collection of ultra-high-res images. Right now, I'm using this slick app to scroll through the Library of Congress.
So what exactly is Microsoft doing backing the iPhone? Doesn't it know that it's helping out a rival? Sure, Microsoft has no problem profiting from Apple's success when it can. Microsoft Office is one of the most popular Mac programs. However, doesn't it realize the long-term harm of making Apple -- and everything from its operating system to its Safari Web browser -- more popular?
Don't assume I'm letting Apple off easy this week. I may as well split this fifth trophy in two, as long as the Mac daddy is around. What was Apple thinking in announcing that next month would mark its final appearance at the annual Macworld Expo? Will Steve Jobs really cede his customary keynote speech to subordinate Phil Schiller?
Apple's stock got slammed on the news, and rightfully so. You don't spring news like this on the market. If you don't have a succession plan, you deserve to get mashed into applesauce.
Let's beat the dumb drum: