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This Week's 5 Dumbest Stock Moves

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. One is the loneliest console
Microsoft  (NASDAQ: MSFT  )  has a problem. The Xbox One isn't selling as quickly as the rival PlayStation 4, so Microsoft will introduce a cheaper version of its console. The $399 version will match the PS4's price, but getting that $100 price cut means eliminating the Kinect motion-based controller.

In theory, that's not a big deal. The PS4 did the same thing last year, selling its camera-based controller as a separate accessory. The rub here is that developers have been making games for the Xbox One under the assumption that Kinect is standard equipment. They're not happy right now, and a console doesn't fare well if it infuriates the game makers that it needs.

Another problem is that Microsoft is making the $399 Xbox One available on June 9, but the Kinect as a stand-alone accessory won't hit the market until the fall. It's bad enough that announcing an effective price cut for something that is four weeks away will freeze sales in the interim. Now folks buying them will have to wait a few months if they decide they want the Kinect that many games assume is included.

2. A blunder's born every minute
Shutterfly is a pretty effective marketer in reaching out to registered users with marketing missives, but it blew it this week.  

"There's nothing more amazing than bringing a new life into the world," read a Shutterfly promo sent out earlier this week. "As a new parent you're going to find more to love, more to give and more to share -- we're here to help you every step of the way."

It was supposed to go out to people who have ordered birth announcements, but the offer to pick up matching thank-you notes went out to a much broader audience of Shutterfly customers. It may seem like little more than a harmless mistake, but it probably didn't seem that way to recipients who have lost a child or haven't been able to have one.

3. The international language of misdirection
It's starting to sound like a broken record -- or, at the very least, a broken Chevy -- but General Motors (NYSE: GM  ) had another wave of automotive recalls going out this week. Five recalls covering a total of 2.7 million cars were announced. The largest of the recalls covers 2.4 million cars with a potential brake light failure problem that GM has supposedly known about since 2008.

Adding insult to injury, money manager filings on Thursday afternoon showed that Warren Buffett and David Einhorn had trimmed their stakes in GM. I guess you could say they're peeling out. 

4. Climbing the Great Wall of Worry
Shares of NQ Mobile  (NYSE: NQ  )  plunged 29% on Thursday after the company warned that it will once again be delaying its annual report. The provider of mobile Internet services in China came under fire last year when Muddy Waters accused NQ Mobile of shoddy accounting.

The original filing deadline was the end of April. A 15-day extension apparently wasn't enough. The delay doesn't mean that Muddy Waters was right, but it certainly makes the bearish argument more persuasive.

5. Shop until the comps don't drop
Wal-Mart  (NYSE: WMT  )  continues to disappoint. The world's largest retailer posted flattish sales growth and a larger-than-expected decline in profitability in its latest quarter.

Wal-Mart blamed the weather -- a popular scapegoat this season. However, the discounter's woes go beyond January's snowstorms. Comps have now declined in five consecutive quarters. Low prices aren't enough anymore.

R.I.P., Internet -- 1969-2014
At only 45 years old, the Internet will be laid to rest in 2014. And Silicon Valley is thrilled. The Economist believes the death of the Internet "will be transformative." In fact, the CEO of Cisco Systems -- one of the largest tech companies on the planet -- says somebody's going to bank "14.4 trillion in profit from one concept alone."

Click here for a FREE video that gives you what you need to capitalize on the little-known company behind this concept.

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Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

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Related Tickers

8/28/2015 4:00 PM
GM $29.00 Up +0.42 +1.47%
General Motors CAPS Rating: ***
MSFT $43.93 Up +0.03 +0.07%
Microsoft CAPS Rating: ***
NQ $4.27 Up +0.07 +1.67%
SFLY $39.33 Up +0.52 +1.34%
Shutterfly, Inc. CAPS Rating: *
WMT $64.94 Down -1.14 -1.73%
Wal-Mart Stores CAPS Rating: ***