Stupidity is contagious. It gets us all from time to time, and even respectable companies can catch it. As I do every week, I've rounded up five financial events so dumb, they may make your head spin.
1. Let me teach you the sleeper hold
If former wrestler Jesse "The Body" Ventura was able to pull off a colorful political career, why not the CEO of World Wrestling Entertainment (NYSE: WWE ) ? Linda McMahon resigned from the wrestling league's top spot on Wednesday, announcing her candidacy for Chris Dodd's Connecticut seat in the U.S. Senate.
Don't laugh. McMahon will be a serious contender. Her husband Vince may be the charismatic face of the family business, but Linda has been a shrewd chieftain in an industry that continues to thrive. Everybody knows that wrestling is fake, and mixed martial arts leagues are gaining momentum from fans of more realistic bouts, but pro wrestling remains very much in the fight.
World Wrestling Entertainment was the subject of last week's "Throw This Stock Away" column. I think McMahon's move vindicates my bearish thesis. If even the CEO finds politics to be a more appealing arena, what are shareholders sticking around for?
2. When a tablet isn't a tablet
Let's hope it's not too late for Hewlett-Packard (Nasdaq: HPQ ) to rename its DreamScreen, because the new gizmo's shaping up to be a nightmare.
The tablet-like devices admittedly look very cool. They sport flat 10-inch and 13-inch screens, and they're priced comparably to low-end netbooks -- below the $300 mark.
However, these Wi-Fi gadgets only perform a limited number of tasks, such as streaming Internet radio, checking Facebook walls, and browsing photos on HP's own Snapfish. In short, the DreamScreen's really a glorified digital photo frame.
Obviously, HP would have to charge more if it crafted a true computing or Web-browsing device. However, even at $249 and $299, what good is a Web appliance that can't check email or stream YouTube videos?
3. Mon-Zune season
Speaking of ill-fated gadgetry introductions, Microsoft's (Nasdaq: MSFT ) new Zune HD hit the market on Tuesday.
It's no iPod killer. Sadly, it's not even an iPod tickler. It may pack some slick features, including a multi-touch OLED screen, an HD radio tuner, and the ability to play HD movies on a high-def television (via a $90 dock accessory). But it's lacking the iTunes ecosystem, the 65,000-plus App Store marketplace, and the video camera that's now built into Apple's (Nasdaq: AAPL ) low-profile iPod nano.
There is naturally room for more than one maker of portable media players, but if Microsoft wants to steal a chunk of Apple's market share, it'll either have to dramatically undercut the iPod on price, or truly revolutionize the medium. It's falling short on both counts.
4. Flash flood
Can you buy your way out of a crummy quarter? Adobe Systems (Nasdaq: ADBE ) is giving it a college try. The software juggernaut announced the $1.8 billion acquisition of online analytics specialist Omniture (Nasdaq: OMTR ) , just as it posted a 21% slide in fiscal third-quarter revenue. Earnings fell even harder.
Adobe has a lot of sexy products and popular Web technologies, but it's just not cutting it in this recession. Omniture is a good buyout, but Adobe's lack of organic growth should concern investors.
5. Do the math
Goldman Sachs upgraded shares of Aetna (NYSE: AET ) . That's not a ringing endorsement for the insurer, since the rating's merely been bumped up to "neutral." However, Goldman Sachs nabs a mention as this week's dumb analyst move, given the price target.
Goldman's Matthew Borsch is increasing his price target on Aetna from $23 to $28. Why is this a problem? Well, the stock was trading around $30 when the upgrade took place. In other words, his price target suggests the stock will trade lower in the near-term -- which doesn't exactly match his that "neutral" rating. Upgrading stocks, while issuing price targets lower than the stock's current standing, is a pretty dumb thing to do.
Let's beat the dumb drum:
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