This Week's 5 Dumbest Stock Moveshttp://www.fool.com/investing/general/2012/02/09/this-weeks-5-dumbest-stock-moves.aspx Rick Aristotle Munarriz
February 9, 2012
Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. So let's do as I do every week and take a look at five dumb financial events from the past seven days that may make your head spin.
1. See you next fall
The travel reviews website operator saw revenue climb 30% to $137.8 million, but earnings rose by a weaker-than-expected 19% to $0.16 a share. Making matters worse, TripAdvisor's conference call hinted at rising costs as the company spends heavily on search-engine marketing for traffic through 2012.
Benchmark Co. downgraded the shares on concerns over "increased spending levels, lower cost per click, and slower hotel traffic growth."
TripAdvisor was spun off less than two months ago, making this its first quarterly report as a standalone public company. Well, if first impressions are any kind of indication, this place may be a dump.
2. You can't be Sirius
Why did Sirius XM make it to the "dumb" list this week? Well, I think CEO Mel Karmazin blew it by keeping revenue guidance for 2012 at $3.3 billion. How can revenue only grow by "almost" 10% when subscriber growth is targeted to climb 6%, a 12% rate hike is going to kick in as members renew, and streaming perks should bump average revenue per user nicely higher?
The $3.3 billion revenue target was initiated five months ago, and that was before a stronger-than-expected fourth quarter in terms of new subscribers and improving auto sales. Analysts were already perched at $3.36 billion in revenue for 2012, but the premium radio provider didn't drive up to meet them.
Let's not take the company to task for the margin contraction. You never like to see adjusted earnings climb just 10% on a 42% top-line surge, but analysts were expecting that. Pushes like Sohu's into search and especially online video just don't pack the kind of wide profit margins that Sohu finds in its online gaming business.
However, Sohu's gu