This Week's 5 Dumbest Stock Moves

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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. Rumor-starters better learn to read
Shares of Netflix (Nasdaq: NFLX) took off on Monday, on buyout speculation that Amazon.com (Nasdaq: AMZN) is making a play for the DVD rental giant. This is the kind of deal that would have made sense years ago. It's ludicrous today.

How do I unmerge thee? Let me count the ways:

• Netflix is growing nicely in this recessionary climate, so the buyout premium would have to be huge.
• Amazon's model of selling piecemeal digital video rentals cuts against the grain of Netflix's sticky solution of making its streaming content free to members on unlimited DVD plans.
• Amazon has historically come up with organic solutions to digital delivery. Why change that with a $3 billion to $4 billion purchase?
• Amazon is kicking affiliates to the curb in states demanding that the online retailer collect sales taxes if it has a presence in those states. Netflix has dozens of regional distribution centers. 

2. Take-Two's bio shocks
Maybe Take-Two Interactive (Nasdaq: TTWO) should just shut its yap when it comes to issuing guidance. The renegade video-game developer behind the Grand Theft Auto and BioShock franchises is delaying another title and seriously watering down its bottom-line outlook for fiscal 2009.

Less than two months ago, Take-Two bumped a pair of small game releases to fiscal 2010, but figured that it would still break even this year. Now it's warning that a pivotal release -- BioShock 2 -- also won't hit the market this fiscal year. Along with other internal failings and calamities, Take-Two is now warning investors to expect a loss of at least $0.80 a share.

If you can't guide -- and you can't dance -- don't offer guidance.

3. Mr. Softy goes cloud-crashing
Microsoft (Nasdaq: MSFT) senses the threat of cloud computing. It will roll out a free online version of its popular Office productivity programs. Office components such as Word and Excel are industry standards in word processing and spreadsheets, respectively. The company is assuming that if it dives into the pool, offering a scaled-back version of the real deal, it will silence the upstarts.

It may seem great on paper, but isn't it simply educating the market on the merits of server-based apps? If folks are fine with Web-based solutions, then they may either be just fine using only Microsoft's free version or move to rival offerings -- if tollbooths go up.

Microsoft gets points for the proactive approach, but it's ultimately bad news for investors as another cash cow is sent out to pasture.

4. Mauled at the mall
Don't go away, Microsoft. I need you for one more entry this week.

The world's largest software company is coming to a mall near you in a few months. That, in and of itself, is old news. We knew that Microsoft has wanted to ape Apple's (Nasdaq: AAPL) retail success for months.

However, its actual placement in some malls is going to throw you for a loop.  

"We're going to have some retail stores opened up that are opened up right next door to Apple stores this fall," Chief Operating Officer Kevin Turner told developers Thursday.

The techies applauded, but what do they know about suburban shopping malls? This could be disastrous for Microsoft. Apple stores are perpetually cool and busy. What happens to the Microsoft brand if it can't keep up with the Jobses?

It's going to have to wow mall audiences. If not, maybe there's a spot between an Orange Julius and a Conchita's House of Corkboard available in the quiet part of the mall.

5. Janus loses its luster  
Poor Janus (NYSE: JNS). The mutual fund operator posts lousy quarterly results, shows its CEO the door, and then raises capital by printing new shares at $11 a share (roughly a third of its 52-week high).

This would have been a bad week for most companies, but shares of Janus rose on speculation that a suitor -- either MassMutual or Franklin Resources (NYSE: BEN) -- was interested in swallowing Janus whole.

The rotting cherry on top, though, is that the same unidentified source spreading the buyout rumor also indicated that Janus had pushed its CEO to resign because he was in favor of a sale (and the board, clearly, was not).

It's hard to figure out Mr. Market. The stock rises on acquisitive chatter, but the pro-buyout CEO has been dismissed. In mythological times, the two-faced Janus can look forward and back at the same time. I think Janus shareholders are hoping for the same thing.

Let's beat the dumb drum:

• Last week's bozos.
• The previous week's boneheads
• Last year's silliest CEO quotes.