This Week's 5 Dumbest Stock Moves

Silly corporate moves are never in short supply. Let's take a look at five that may make your head spin.

1. Tiles for miles and miles
Hasbro (NYSE: HAS  ) finally got around to releasing an online version of its Scrabble board game as a Facebook app, but it's still unlikely to catch up to the renegade Scrabulous game.

Hasbro can't seem to catch a break. When it went after Scrabulous litigiously, fans of the popular Facebook rip-off threatened to boycott the toy company. Now it's going after Scrabulous competitively, and it's coming up short.

I wonder how long it would take for me to find a programmer to code up unauthorized versions of other Hasbro hits like Monopoly, Operation, and even a virtual Mr. Potato Head.

2. Yahoo! for a double word score
The Microhoo saga began a new chapter this week. Carl Icahn and Microsoft (Nasdaq: MSFT  ) issued matching statements on Monday, suggesting that Microsoft may consider a new run for Yahoo! (Nasdaq: YHOO  ) , but only if shareholders replace the board.

Yahoo! had the gall to respond with this gem:

"We feel very strongly that this would not lead to an outcome that would be in the best interests of Yahoo!'s stockholders," reads the response. Really, Yahoo!? If we're looking at the same chart, the only times that the stock has shown signs of life is when Microsoft comes a-knocking.

3. Virtually there
Virtualization software leader VMware (NYSE: VMW  ) saw its stock shed roughly a quarter of its value after CEO and co-founder Diane Greene unexpectedly stepped down. You've got to be kidding me! A company pulls off one of last year's rare blockbuster IPOs, yet it doesn't have the sense to keep its CEO at the helm? Talk about going from VMware to VMwary.

4. The upside of zero
Troubled lender IndyMac (NYSE: IMB  ) got slapped with the mother of all insults, when a Friedman, Billings, Ramsey analyst cut the stock's price target from $1 to a flat-out zero. Nil City! Not even a fraction? Nope.

Then again, IndyMac is dramatically slashing its workforce and no longer accepting certain loan submissions. I guess the best thing about being slapped with a $0 price target is that the analyst's next move -- if there is one -- can only be upwards.

5. Losing the hyphen
Electronic Arts (Nasdaq: ERTS  ) assures the Federal Trade Commission that it won't close on its deal to acquire Take-Two Interactive (Nasdaq: TTWO  ) until Aug. 21, or earlier if FTC completes its investigation. That's noble. The problem? EA has extended its tender offer to Take-Two three times and still has less than 8% of the shares outstanding tendered.

In other words, it's promising to refrain from something that it can't do anyway. That's like me saying that I won't beat LeBron James in a little 1-on-1 basketball until Aug. 21. There's a good chance that EA will win some more Take-Two support by next week's tender deadline, given the recent dip in Take-Two's stock, but the restraint is laughable at this point.

Let's beat the dumb drum:

Microsoft is a Motley Fool Inside Value pick. VMware and Take-Two Interactive Software are Motley Fool Rule Breakers selections. Hasbro and Electronic Arts are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters today, free for 30 days.

Longtime Fool contributor Rick Munarriz is a fan of dumb and smart business moves. Investors can learn plenty from both. Hdoes not own shares in any of the stocks in this story. Rick is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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  • Report this Comment On July 14, 2008, at 11:49 PM, bayam wrote:

    VMWARE: You've got to be kidding me! A company pulls off one of last year's rare blockbuster IPOs yet it doesn't have the sense to keep its CEO at the helm?


    I'm at a loss with this statement. Does a blockbuster IPO indicate that the CEO is managing the company's operations and strategy effectively? Is Jerry Yang qualified to be CEO of Yahoo because Yahoo had a great IPO? It's not clear to me that the IPO price set by the market is the best indicator of CEO performance.

    I also don't see any indication that the new CEO, given his experience, will not meet or exceed past results.

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