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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. High-def denial
Poor Comcast (Nasdaq: CMCSK ) . The country's largest cable provider closed out its latest quarter with 22.9 million video customers, shedding 822,000 couch potatoes over the past year.
Comcast's financials are holding up nonetheless. It's charging its cable customers more, even as it gains ground as a broadband access provider and Web-based telephony player.
However, the reason that Comcast makes the cut this week is that it has the gall to blame its defections -- in part -- on the economy. Gee, one would think that Comcast raising its rates -- up 10% over the past year, to an average of $129.75 per subscriber -- would be a major factor.
Comcast's satellite television rivals likely gained ground during the quarter, as they have so far this year. Maybe home-theater convergence technology has finally arrived for folks fed up with escalating cable bills.
2. The Giants won, by the way
Comcast isn't the only cable behemoth to make this week's list. Cablevision (NYSE: CVC ) gets the "dumb and dumber" award for hanging millions of its subscribers out to dry during the World Series.
In a negotiating stalemate with News Corp.'s (NYSE: NWS ) Fox, Cablevision's refusal to meet Fox's programming price demands prevented 3 million Cablevision subscribers from watching the first World Series game on Wednesday.
Then, in a lame attempt to silence the uproar, Cablevision offered its subscribers a $10 credit to apply to streaming the series directly from Major League Baseball. That may seem like a reasonable gesture, but think about it. Cablevision is teaching its subscribers how to cut the cord and rely on the Internet for televised content. It's like Superman handing Lex Luthor a box of kryptonite. Nice!
3. An Apple rumor a day
Ever since Apple (Nasdaq: AAPL ) defended its $51 billion war chest by suggesting that it may have a strategic play or two in the future to bankroll, everybody's been playing matchmaker like some Silicon Valley Patti Stanger.
Unfortunately, even silly rumors can move stocks.
How? What would Apple do with Sony's movie studio and record label? It would have to dump these, or risk alienating the rival media moguls that Apple relies on to keep iTunes humming along. What would it do with Sony's Windows-rific laptops? Isn't Apple all but killing Sony's PS3 and PSP gaming businesses with its dirt-cheap apps?
Maybe Apple can use Sony's home theater gadgetry or its well-regarded cameras, but what's the point -- if Apple would probably just rebrand it anyway?
The only things dumber than unlikely rumors are the folks who dismiss logic on the path to bidding a flawed acquisition target higher.
The athletic footwear maker suffered order cancellations from several accounts that apparently overbooked for the back-to-school season. Nobody likes a buildup in inventory, and Skechers hopes to clear out the excess shoes at "reasonable margins" over the next six months.
Why did so many retailers cancel their orders? Are rival brands also not selling? Are Skechers' toning shoes a fad?
Mr. Market doesn't like uncertainty, nor questions that can't be readily answered. He also doesn't take too kindly to bloated inventory levels.
5. Where there's smoke
Investors have spent the past few months snapping up security software firms, given the healthy prospects for sector consolidation. Unfortunately, fundamentals sometimes come into play.
Shares of Sourcefire (Nasdaq: FIRE ) were put out yesterday, after the maker of intrusion detection software for networks provided a bleak near-term outlook. I guess shareholders wish that their portfolios could have intrusion detection functionality.
Sourcefire is a quality company, but there was too much speculative sizzle in the shares, which had nearly doubled off their summertime lows before yesterday's 23% plunge.
Which of these five moves do you think is the dumbest? Share your thoughts in the comment box below.