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. Baidu holds Spinal Tap drummer auditions
A week ago today, shares of Baidu (Nasdaq: BIDU ) hit an all-time high. China's leading search engine gave gobs of that away earlier this week, when it announced that its CTO was resigning.
The departure is compounded by the resignation of Baidu's COO 10 days earlier.
What in blazes is going on at Baidu? This should be a time of drooling among its executives. Tensions between China and stateside search engines may very well result in Baidu commanding an even thicker slice of the world's most populous nation. Seize the opportunity, Baidu. Don't spook investors by scaring all of your executives away!
2. It's about Times
As has long been telegraphed, New York Times (NYSE: NYT ) will begin charging its most avid online readers for access. Beginning in early 2011, the popular newspaper's website will turn to a metered model, charging readers for access after they've consumed a few articles for free every month.
"This will enable NYTimes.com to create a second revenue stream and preserve its robust advertising business," reads the release.
Oh, where do I begin to pick this one apart? OK, let's start with the statement that installing tollbooths will still allow it to preserve its "robust" advertising business. It won't. Folks will begin avoiding NYTimes.com articles, especially for stories being reported elsewhere. We're a bunch of freeloaders, so of course we're going to avoid bumping up against the ceiling of sneak peeks.
If advertising is so "robust," why turn to a traffic-stifling policy?
My other beef is the rollout date. This is pathetic, and emblematic of what is so wrong with newspapers today. It's announcing something that it won't be able to implement for at least another 12 months? Give it up, NYT. You're too slow for cyberspace.
3. Buffett buffet for the masses
Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) shareholders approved the move to split its B shares on a 50-to-1 basis, presumably to give smaller Burlington Northern investors the option of a tax-free stock swap instead of having no choice but to get cashed out.
I like the move. It means less cash coming out of Berkshire Hathaway. It broadens the potential ownership base. It makes the stock more index-friendly. It will move a few more boxes of See's Candy at the next, even more crowded, annual shareholder meeting.
The "dumb" move here comes from the folks complaining about the move. Buffett is no fan of splits, and neither are many of his disciples apparently. Even if Berkshire Hathaway has everything to gain, purists aren't happy.
Excuse me? Aren't we talking about B shares that were created on a 30-to-1 adjusted basis of the original A shares? This is like complaining about a vendor selling fried Twinkies at a Chicago Cubs night game. Tradition has already had its umbilical cord snipped. You're a generation too late to the pity party, Buffetteers.
4. How can you be out of stock on Gigli?
Shares of Blockbuster (NYSE: BBI ) suffered a 33% shellacking yesterday, after the DVD rental chain announced that its December efforts to load up on inventory and ramp up its marketing budget failed to drive holiday sales.
Blockbuster is talking down its guidance for all of 2009, and the retailer is back in cost-cutting mode in 2010.
Maybe I'll stop by my local store and drop a "Get Well Soon" card in the movie return slot.
5. Stupid late-night host tricks
Let me teach you how you turn a peacock into a lemon. You take two late-night personalities that are struggling with ratings -- pit them against one another -- and then choose the one that local network affiliates are blaming for their pathetic lead-in audiences at 11 p.m.
I'm a fan of both Jay Leno and Conan O'Brien, but General Electric's (NYSE: GE ) majority-owned NBC has truly dropped the ball here. O'Brien's final Tonight Show airs tonight, leaving NBC with little choice but to air reruns of a show that wasn't doing so hot when it was first-run content until the Olympics kick in next month. The Leno backlash and bellyaching will begin in March.
Poor Comcast (Nasdaq: CMCSA ) . Is it too late to walk away from the mess that it's acquiring?
Which of these five moves do you think is the dumbest? Share your thoughts in the comments box below.
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