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. The Finnish line
Nokia (NYSE:NOK) may be getting $7.2 billion to hand over its devices and services unit to Microsoft (NASDAQ:MSFT) but it can't seem to shake the uproar in Finland over the $25 million bonus that departing CEO Stephen Elop will be receiving.
Nokia got itself into a pickle this week after earlier comments from Nokia's chairman about Elop's contract -- claiming his terms were similar to those of previous CEOs -- came under fire in Finland's leading newspaper. Helsingin Sanomat reported on Tuesday that the contract that allowed Elop to destroy shareholder value before unloading Nokia's prized asset on the cheap to Elop's former employer was very different.
Nokia's been reportedly trying to get Elop to save face by turning down the bonus, even though Microsoft will be paying 70% of it. But the Finnish newspaper reported on Wednesday that Elop is adamant about keeping it because he's in the middle of a divorce and his soon-to-be ex-wife is unlikely to accept that act.
Elop has got this so backward that he may as well change his last name to Pole.
Microsoft held its Surface media event on Monday.
The software giant has been struggling in the tablet space. Microsoft has spent a lot of time and money here, only to have 4% in global market share for its efforts. The Windows RT platform has been a stinker, and that's likely why the company is ditching the RT from the new moniker and simply calling it Surface 2.
The Surface Pro 2 has a better shot at succeeding than the Surface 2 despite its stiff starting price of $899. It actually runs Windows and there will be a market there for that. But Surface 2 is where the company keeps stumbling.
The first line of Surface tablets sold so poorly that Microsoft took a $900 million inventory accounting charge. It lowered the price of the Surface RT to $349 this summer, and that would've possibly been a compelling entry-level price point for Surface 2 but Microsoft decided to increase the price to $449.
Really? Yes, it's packed with improvements but even the iPad has stuck to its price points. The moment that Microsoft lowered the price of the Surface RT -- even if it was for clandestine clearance purposes -- it should've stuck with it. Folks won't buy the Surface 2 now since they know that a price cut will likely be coming after the holidays if sales continue to struggle.
It took Microsoft a wasted 2012 holiday season to get the pricing right, and now it's getting it wrong again.
3. Hello, Larry
If anyone had a right to skip corporate activities to catch the America's Cup, it was Oracle's (NYSE:ORCL) Larry Ellison. After all, Oracle is the official backer of the American team. But missing last week's earnings conference call was one thing; skipping this week's Oracle World marquee speech -- the biggest annual event for the enterprise software's customers -- to attend yet another boat race is another.
Yes, it was an amazing comeback win for Oracle's team over New Zealand. It's hard to fault Oracle's CEO absence in retrospect. But Ellison's absence comes at a time when his pay is coming into question, and skipping out on the customer event doesn't seem so bright after Oracle's revenue came in a little light in its most recent quarter.
4. Penny for your thoughts
J.C. Penney (NYSE:JCP) waited until the worst possible moment to print new shares.
The fading department-store retailer hit a new 52-week low on Thursday, and a few hours later the company revealed it will be selling at least 84 million shares. The secondary offering should raise roughly $900 million, but how desperate must J.C. Penny be when its offering stock at a 52-week low?
There have been many companies that have announced secondary offerings this month, but most of those moves have come near their 52-week highs. Leave it to J.C. Penney to get it wrong yet again this year.
There's also a sad and ironic twist here. J.C. Penney hit a new low because Goldman Sachs downgraded its opinion on the stock, suggesting investors buy credit default swaps as they brace for a possible bankruptcy.
Which company is leading the secondary offering of common stock that would probably be rendered worthless in bankruptcy? You got it: Goldman Sachs is the sole book-running manager for the offering.
5. Rearranging the deck chairs
The waters remain rough at Carnival (NYSE:CCL). The world's largest cruise-ship operator posted disappointing quarterly results on Tuesday.
Guidance made more than a few investors seasick. Carnival's targeting essentially breakeven results for the current quarter, well below the profit analysts were forecasting. The pros also now see a loss during the holiday quarter.
The reason for the downbeat outlook is that customers are booking fewer cruises on Carnival, and they're paying less.
"During the past few months, Carnival Cruise Lines has seen a steady improvement in brand perception among U.S. consumers based on national market research data," Carnival's CEO said in the earnings release. Well, if that's the case, why are bookings declining and getting cheaper?
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft and Oracle. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.