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. That's not a good thing
Martha Stewart Living Omnimedia (NYSE: MSO ) will have to do with fewer home craft gurus. The Wall Street Journal is reporting that the lifestyle media is laying off 14% of its workforce, including several executives.
Martha Stewart Living Omnimedia has been struggling, posting deficits through most of the past decade. It's hard to grow when your namesake icon is fading in popularity. However, cutting jobs just before the holidays isn't the kind of move that a company known for dolling up edibles and crafts this time of year should be announcing.
2. Downward-facing dog
Stagnancy has hit lululemon athletica (NASDAQ: LULU ) . Shares of the yoga retailer slumped 12% on Thursday after the company warned that comps will clock in flat during the holiday quarter.
Investors aren't used to seeing lululemon treading water. Comps have been on a tear over the years, remaining positive even earlier this year during the embarrassing recall of sheer yoga pants. It seems as if its missteps and the outspoken ways of its founder have finally started to catch up to the Canadian retailer.
The chain expects to earn $0.78 to $0.80 per share during the quarter -- well short of the $0.84 a share that the pros were targeting.
3. Biotech goes bust
Thursday was a brutal day for ImmunoCellular Therapeutics (NYSEMKT: IMUC ) investors. The stock shed nearly 60% of its value after a critical phase 2 study for its potential cancer tackler didn't pan out. The overall survival of glioblastoma patients was not statistically significant.
That's naturally the risk with buying into young biotechs with so much riding on a single treatment in the pipeline.
4. Seethe world
Things don't get any easier for SeaWorld (NYSE: SEAS ) . Cheap Trick and Trisha Yearwood are the latest musical acts to bow to fan requests that they cancel upcoming concerts at the marine-life theme park.
Knocking the theme park operator has gone viral since this year's release of the Blackfish documentary, which depicts the downside of keeping killer whales in captivity.
Making matters worse, the private-equity firm that took SeaWorld public boosted the number of shares that it was selling in a secondary offering this week.
5. Toll taker
In a sign that homebuilders are getting too greedy, Toll Brothers (NYSE: TOL ) reported quarterly results this week showing that the average price of its new homes soared 21% to $703,000. That's a lot of cabbage.
However, Toll is paying the price for its markups. New orders declined 10% during the period. Toll toils away at the high end of the new housing spectrum, and its brazen push for pricier homes is running into some resistance at a time when rising mortgage rates aren't helping.
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