This Week's 5 Dumbest Stock Moves

It was a wild week for the companies that didn't quite get it right. Let's go over five companies that just flat-out got it wrong this week.

1. Black and blue 'Berry
The deadline for BlackBerry  (NASDAQ: BBRY  ) bids was Monday, but the reeling smartphone pioneer decided to call off what was likely a lukewarm auction.

BlackBerry instead decided to oust its CEO, end its strategic review, and raise $1 billion in convertible debt that it sold to a group of investors led by the private-equity firm that was originally bent on buying all of BlackBerry.

The market sold off the stock on the news, and rightfully so. You don't shoo away the prospective gentlemen callers and raise money for a turnaround when you've been unable to turn your fledgling smartphone business around. We live in an iOS and Android world now, and BlackBerry's only shot at regaining favor would have come at the hands of a new owner with broader financial resources.

2. Best Buy gets cocky
"A year ago people said that showrooming would kill Best Buy," CEO Hubert Joly told The Wall Street Journal in an interview this week. "I think that Best Buy has killed showrooming."

Best Buy (NYSE: BBY  ) certainly seems confident it has vanquished the showrooming beast that has customers strolling the superstore's aisles before ordering the same goods for less online. Its new holiday ad -- starring the equally smug Will Arnett -- even pitches Best Buy as a holiday showroom. 

But the confidence and taunting aren't justified by reality. Best Buy store-level comps have been negative for the past three years, and analysts see sales falling 11% this holiday quarter. Best Buy's not killing showrooming, unless the plan is to kill it through kindness.

3. Make it a Blockbuster fright
Two years after acquiring Blockbuster, DISH Network (NASDAQ: DISH  ) will be closing the 300 stores remaining in this country.

It could be worse. The satellite television provider paid little more than what liquidators were willing to pay at the time. But instead of trying to turn the stores into iconic entertainment hubs, DISH Network chose to run Blockbuster the same way previous owners did, outside of promoting DISH satellite subscriptions. 

DISH is still retaining Blockbuster's video library and brand for online offerings. It still could have been so much more instead of tethering itself to stores that were all about physical distribution in an era of digital delivery.

4. Panned noodles
With IPOs, you only get one chance to make a first impression. If you want to be successful you can't disappoint investors out of the gate, yet that's exactly what Noodles & Co. (NASDAQ: NDLS  ) did this week by posting weak revenue growth for its first full quarter as a public company.

Revenue rose 15% to $88.9 million at the chain that specializes in pasta and other noodle-based dishes. But analysts were holding out for 18% top-line growth. It's hard to impress when comps climb a mere 2.1% during the period that should have benefited from the brand awareness at Noodles & Co., given its hot IPO this summer. 

5. Tesla's cells are its prison
Tesla Motors (NASDAQ: TSLA  ) may claim to have the safest car in America, but it certainly isn't the safest stock.  

Shares of the company behind the all-electric Model S sedan stumbled after posting financial results that were solid but failed to justify the stock's massive gains through 2013. There was disappointment in Tesla delivering just 5,500 cars during the quarter, a figure that isn't that much better than what the other leading electric-car brands are doing. Between 1,000 of those cars going overseas and Tesla's move earlier this year to offer the equivalent of leases, one would think that the company would be dramatically ramping up production. 

Production isn't the same as orders, but it's not as if the backlog is growing out of whack. Given Tesla's huge gains this year, the market may be pricing a larger addressable market than what is presently served by the expensive Model S. Tesla does have a plan to address the mainstream market in a few years, but lofty valuations aren't always kind for companies that require patience.

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  • Report this Comment On November 08, 2013, at 6:22 PM, lenholliday wrote:

    Best Buy(BBY) management had better enjoy this Christmas, because I think it will be the last for Best Buy! Short Best Buy(BBY) with a short term target of $25 and then on to zero($0.00) over the next 36 months! Time will tell!

  • Report this Comment On November 09, 2013, at 3:21 AM, darylgSD wrote:

    len, you have been preaching to short Best Buy since August. Hows that going for you? From the charts it doesnt look good. Will there be a good time to short this I believe so, but it could be a while before that time comes.

  • Report this Comment On November 09, 2013, at 10:27 AM, reww1234 wrote:

    BBY is not going anywhere, are you just re-using logic and articles from a year a go?

  • Report this Comment On November 09, 2013, at 9:20 PM, Netteligent09 wrote:

    I agreed with len: BBY is perfect Short.

  • Report this Comment On November 09, 2013, at 9:43 PM, Mega wrote:

    "a group of investors led by the private-equity firm that was originally bent on buying all of BlackBerry."

    Fairfax isn't a private equity firm, and they never wanted to buy all of Blackberry.

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