Stupidity is contagious -- even respectable companies can catch it. As we do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. Wal-Mart's late to the gamer party
Wal-Mart (NYSE: WMT ) is throwing its hat into the used video game market. The country's largest retailer will begin accepting video games as trade-ins for store credit at most of its stores next week. Later this year, it will begin offering the pre-owned and refurbished discs.
The market's reaction was to worry about video game publishers and the companies already dabbling in this space. Those are legitimate concerns. If Wal-Mart's promoting secondhand games, there will be less money to go around for shrink-wrapped titles for publishers to sell. Wal-Mart will also likely eat into the thick margins of the resale business by offering more competitive prices.
However, this is a market that's already in a funk. The leading video game retailer saw its used sales fall in 2012 and continue to slide through the first three quarters of 2013. Wal-Mart's getting into the resale of physical games at a time when publishers are going digital to deal directly with gamers.
Wal-Mart's late again.
Renren's revenue plunged 29% with its operating loss nearly doubling for the period. The same company that hit the market as a ballyhooed IPO at $14 three years ago is no longer the growth story it was at the time. Monthly unique log-in users have fallen from 56 million to 45 million over the past year.
Pushing into online gaming hasn't helped, as both businesses posted big declines. Renren needs a new act.
3. Take off your 3-D glasses
Last week was rough for most 3-D printing stocks, and things aren't getting any easier this time around. ExOne (NASDAQ: XONE ) shares tumbled 10% on Thursday after posting disappointing financials. Printer sales fell 22%, and ExOne's guidance calls for a soft 2014.
Adding salt to ExOne's wound, HP revealed that it will be rolling out a 3-D printer later this year. The news sent the shares of other makers of 3-D printers lower.
4. That's a pretty big pothole
Toyota (NYSE: TM ) is writing a big check to settle a thorny incident. The Japanese automaker will pay $1.2 billion to settle charges that it concealed information about an acceleration issue that has been linked to at least a couple of fatalities.
Despite the now-remedied problem that caused accelerator pedals to get stuck, with occasionally horrendous consequences, Toyota stuck to its painfully appropriate "Moving Forward" tagline until two years ago. The new tagline -- "Let's Go Places" -- isn't that much better when you think about it.
5. Bye-bye, baby
After seven years, E*Trade (NASDAQ: ETFC ) is moving on from its talking baby.
The latest commercial -- introduced during Thursday's start of March Madness -- features the iconic E*Trade baby becoming flustered by having to work alongside a singing cat. He quits.
You have to give E*Trade's marketing department props for milking even the departure of the colorful toddler. Not only does he resign at the end of the ad, but there's even a BabyQuits.com website being set up to keep the departure going. For now, it links to the character's Facebook fan page. However, E*Trade is confirming to Reuters that this isn't just a stunt to bring him back along the lines of Family Guy's Brian. So if he is really gone for good, nixing the most memorable character in brokerage ads these days doesn't seem like a smart call.
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