This Week's 5 Dumbest Stock Moves

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Stupidity is contagious. It gets us all from time to time -- even respectable companies. So with that in mind, let's look -- as I do every week -- at five dumb financial events this week that may make your head spin.

1. Shanda's spinoff silliness
What is Shanda Interactive (Nasdaq: SNDA) thinking? The Chinese online-gaming pioneer is thinking about taking the Cayman Islands subsidiary that operates its online games public, as a standalone company.

There are two things wrong with this scenario. The first one is obvious: What is Shanda Interactive without its online games, beyond simply a holding company with a majority stake in its bread-and-butter spinoff?

The second problem is that it makes sense for a company to spin out a rapidly growing subsidiary when it believes that the entire company is being valued for less than the sum of its parts. But that scenario doesn't necessarily apply here. Shanda trades for 17 times Wall Street's projected profitability this year. That certainly seems cheap, but its five public rivals trade for even lower earnings multiples.

2. Take-Two and call me in the mourning
I have to call out Take-Two Interactive (Nasdaq: TTWO) for abusing euphemisms in its earnings press release this week. It's bad enough that the company posted lackluster quarterly results, with an even gloomier outlook for the current quarter, before bouncing back strongly to close out the year.

Euphemism No. 1: Take-Two is delaying a pair of releases and bumping them into the next fiscal year, so that the company can "allow additional development time for the titles and to maximize their full potential in terms of the quality of the player experience and market performance." Really? Why doesn't Take-Two just tell us that the games stink or are excessively buggy at this stage of the development cycle?

Euphemism No. 2: "We are sharply focused on executing our business plan and working to enhance shareholder value," Chairman Strauss Zelnick notes in the release. Really? The stock is trading for roughly a third of the $26-per-share buyout level that the company urged investors to reject last summer. Until the company is able to get its stock even remotely close to that price, let's not talk about enhancing shareholder value.

3. And Bing-o was its name-o
Microsoft (Nasdaq: MSFT) is dusting off Bing.com as its new Web search platform. "Bing" has a nice ring to it, but will Microsoft ever lay off the change-of-address cards for its search business?

Microsoft's search-engine brand has gone from MSN Search to Windows Live Search to Live Search over the past few years. It's no surprise that Microsoft is the rare behemoth that's failing to turn a profit with its online businesses. Like a rave-party circuit trying to avoid the cops, the software giant is too busy going from one abandoned warehouse to another.

For the love of branding consistency, Microsoft needs to pick a name and stick to it.

4. Running out of Time
Time Warner (NYSE: TWX) is finally willing to say goodbye to AOL. The media giant will separate from its struggling online arm by distributing shares of AOL to its shareholders.

This isn't necessarily bad news, but it does illustrate how dumb Time Warner is for not acting sooner. Why didn't it do this several years ago, when Google's (Nasdaq: GOOG) $1 billion investment for a 5% stake gave AOL an implied value of $20 billion? Why didn't it spin off AOL before its access business began crumbling, or, at the very least, sell its dial-up subscribers to a rival provider, such as EarthLink (Nasdaq: ELNK), while they were still worth something? AOL's separation and its eventual market value will only underscore how late Time Warner was in cashing out. For a company with the word "time" in its moniker, it sure has lousy timing.

5. Swine tasting on the Lido deck
This is not going to look good on Carnival's (NYSE: CCL) marketing brochures. The world's largest cruise-ship operator had to divert a ship after three crew members were diagnosed with the notorious swine flu. More than 20 passengers and crew members from the previous sailing have since been diagnosed with the malady.

Infectious diseases travel quickly on cruise ships, where constant interaction takes place. The industry has gone through other virus outbreaks before, but the swine flu is making global headlines. In short, this is not going to be good for Carnival in particular or the cruising industry in general.

Let's beat the Dumb Drum:

• Last week's bonehead moves.
• The previous week's dumb moves.
• Last year's silliest CEO quotes.