This Week's 5 Dumbest Stock Moves

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. Not so fresh
What's worse than announcing that your CFO is leaving the company? How about doing that just as you're serving up weaker-than-expected quarterly results?

The Fresh Market (NASDAQ: TFM  ) gave investors that double shot of disappointment this week.

The upscale grocer had been doing well in its first two years of public trading, but its quarterly profit of $0.23 a share was well short of the $0.26 a share that analysts were targeting.

The small-box supermarket remains popular. Comps climbed nearly 6% during the quarter. However, analysts aren't fond of misses on either end of the income statement and the surprising departure of a company's top bean counter.

2. Warehouse clubbed
There have been plenty of one-time dividends piling up for next month.

Costco (NASDAQ: COST  ) announced one of the bigger distributions on Wednesday, agreeing to shell out $3 billion to its shareholders in the form of a one-time payout of $7 a share.

For starters, it's pretty silly when a stock spikes merely on the news of a special dividend. Won't the company be worth that much less after it gets disbursed? However, Costco makes the cut this week because it is also borrowing $3.5 billion to make the meaty payout work.

Really?

I don't care if Costco is getting a great interest rate here. (It is.) It's a bad idea from a company that should know better. It will be paying for next month's distribution for several more years.

3. Nintendon't revisited
Did you know that Microsoft (NASDAQ: MSFT  ) sold more Xbox consoles during last week's Black Friday holiday shopping week than Nintendo's (NASDAQOTH: NTDOY  ) Wii and Wii U systems combined?

However, the reason Nintendo is back this week is the planned rollout of Wii Mini.

Nintendo revealed that it plans to introduce a scaled-back version of 2006's Wii platform for $99. The price may seem right for an old platform, but the kickers are that it won't play older GameCube titles and it doesn't offer online connectivity.

Oh, and it's only going to be sold in Canada.

Forget the geographical limitations. How can a console not provide Internet access? This is what makes video streaming, online diversions, and cheap casual game downloads possible. Aiming for the low end of the gaming market would also make it necessary to appeal to GameCube owners who haven't upgraded to Wii yet. Rendering all of their existing GameCube games inoperable on the Wii Mini isn't going to fly.

4. Ebenezer Scroogled
Microsoftis taking an odd shot at Google (NASDAQ: GOOGL  ) .

Mr. Softy introduced a website called Scroogled.com that pokes fun at Big G for only populating its Google Shopping portal with paid ads. The comparison-shopping site made the switch earlier this year, and Scroogled suggests that visitors resort to Bing Shopping this holiday season for "honest" product searches.

Well, Microsoft isn't so innocent. It too promises "higher visibility" for advertising merchants. It's also currently requiring that merchants interested in being listed go through a premium portal listing service.

There's no free lunch for merchants. There's no "honest" search for shoppers.

5. Amazon doubles up on the intangible
Amazon.com (NASDAQ: AMZN  ) clearly had a good start to the holiday shopping season, letting the market know that it sold twice as many Kindle e-readers and tablets as it did during the same Black Friday holiday week a year earlier.

What does that mean, exactly?

Amazon has no problem putting out press releases marking percentages, but it never gives investors the starting point to base those percentages on. There's nothing wrong with giving an investor a number -- unless you have something to hide.

Case in point: Shortly after Amazon's announcement, Barnes & Noble (NYSE: BKS  ) also revealed that its Nook sales doubled during the holiday weekend.

Does this mean that Barnes & Noble is doing as well as Amazon on the gadgetry front? Of course not, but go ahead and blame Amazon. The moment that it starts giving out the actual number of Kindles and Kindle Fires sold, everyone else will have to follow suit.

Get smart
Everyone knows Amazon is the big bad wolf in the retail world right now, but at its sky-high valuation, most investors are worried it's the company's share price that will get knocked down instead of competitors'. We'll tell you what's driving the company's growth, and how to know when to buy and sell Amazon in our new premium report. Our report also has you covered with a full year of free analyst updates to keep you informed as the company's story changes, so click here now to read more.


Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 30, 2012, at 4:46 PM, FoolinSD wrote:

    I'd bet most Nintendo Game cube fans with controllers already have a Wii. The lack of wifi allows users to choose between ethernet adapter or wifi adapter. Non-issues dude.

  • Report this Comment On December 01, 2012, at 11:54 PM, lowmaple wrote:

    Nintendo. Only in Canada eh.

  • Report this Comment On December 02, 2012, at 12:33 AM, SuntanIronMan wrote:

    I remember once reading an article that said that nearly half (I can't recall the exact number) of all Wii consoles have never connected to the internet. Not that half of Wii consoles that no longer use the internet anymore, but that half never once (in the entire console's life) connected to the internet.

    So maybe Nintendo is smart to save money by removing hardware that half of all current customers have never once taken advantage of.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2134107, ~/Articles/ArticleHandler.aspx, 12/19/2014 3:30:00 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement