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. It's a mile-high buffet
JetBlue (Nasdaq: JBLU ) is following in the footsteps of European trains, regional amusement parks, and Golden Corral smorgasbords. The value-priced air carrier is selling $599 passes, good for unlimited travel across all of its routes from Sept. 8 through Oct. 8.
This may seem like a brilliant idea at first. The monthlong "all you can jet" experiment comes after the peak summer travel season is over, so there should be plenty of capacity available. JetBlue also stands to collect $100 from passengers in no-show penalties or last-minute changes.
However, I see two problems here. The first pitfall is that potential fare-paying customers may be shut out if too many pass-waving flyers fill up the popular routes. The bigger problem won't rear its ugly head until next summer. Prospective passengers will hold back from booking flights on JetBlue during those dates, in anticipation of a repeat offer in 2010.
The only thing harder than the near-term profit crunch of discounting travel is the challenge of eventually weaning customers off those discounts.
2. The map is in your glove compartment, dummy
Shares of car-rental agencies traded higher on Monday after Priceline.com (Nasdaq: PCLN ) posted a healthy 15% spike in volume of its car rental business.
The problem with the sympathy play is that Priceline isn't a bellwether for any of the travel segments it books. For instance, Priceline also posted a 44% increase in hotel-room nights. Good luck finding any lodging chain that saw an uptick in business this year.
Priceline's forte is in "name your price" bids that smoke out the penny-pinchers. If that's a measuring stick, it's only appropriate for discounted auto rentals as well, and that's not something the industry should be happy about.
However, investors didn't even need to connect those particular dots. They could have just looked up the Avis Budget Group (NYSE: CAR ) report from a week earlier. During the same April-May-June period, Avis Budget suffered a 21% decline in car-rental days.
I have no sympathy for those who misread sympathy plays.
3. Tricks and mortar
Yes, Virginia. There is a Santa Claus. He artificially inflates the miserable comps at Macy's (NYSE: M ) .
The department-store chain posted ho-hum quarterly results this week, but the real head-turner came after declaration that same-store comps fell by 9.5%.
"Online sales positively affected the company's second quarter and first half 2009 same-store sales by 0.5 percentage points," reads the report. "Online sales are included in the same-store sales calculation for Macy's, Inc."
So the registers at your average store didn't ring up 9.5% fewer sales. It was actually a 10% decline. Macy's simply uses its macys.com and bloomingdales.com sales as icing for its comps.
I'm glad Macy's is willing to be upfront about this, but now it distorts the snapshot. As online sales become a larger part of the revenue mix, there will be a disparity between retailers that put out legitimate bricks-and-mortar comps and those who top them off with online and mail-order sales.
This is no miracle on 34th Street.
4. Leaving so Zune?
Microsoft's (Nasdaq: MSFT ) Zune HD finally has a release date. Some chains are taking pre-orders on the portable media player, promising a September 15 release date.
Despite some neat perks, such as HD Radio and an OLED touchscreen, there's little reason to believe that a product that's been a fringe player through all previous incarnations will pose any kind of threat to Apple's (Nasdaq: AAPL ) iPod touch.
However, by giving us a date, Microsoft grants us the luxury of launching the countdown clocks to celebrate Microsoft's next paperweight.
Prove me wrong, Microsoft.
5. Drove my Chevy to the eBay, but the eBay was dry
I remember some of the earliest eBay (Nasdaq: EBAY ) success stories, in which antique-shop owners and crafty artisans would close their stores and operate exclusively out of the popular auction site.
Is GM the next antique-shop owner? Just months after dismissing many of its dealerships, General Motors is trying to move cars through eBay.
eBay Motors is a major contributor to the gross merchandise volume moved through eBay as a whole, but typically with used cars. I don't see the brand-polishing appeal of being associated with moving shiny new cars through the same platform that sells Alf ashtrays and Pokemon trading cards.
Let's beat the Dumb Drum: