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This Week's 5 Dumbest Stock Moves

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
Shares of TripAdvisor (Nasdaq: TRIP  ) fell nearly 15% yesterday after the company posted disappointing quarterly results.

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
Sirius XM Radio
(Nasdaq: SIRI  ) posted reasonable quarterly results yesterday. There was plenty to like in the numbers and in the satellite radio giant's comments during the conference call.

  • Margins continue to improve, as adjusted EBITDA and free cash flow continue to grow faster than revenue.
  • Sirius XM plans to introduce personalized music streams and on-demand programming later this year, a move that should boost the number of subscribers paying extra for online access.
  • Some may have been disappointed with Sirius XM's guidance calling for 1.3 million net additions this year -- after tacking on 1.7 million accounts in 2011 -- but that's not too shabby considering the 12% price hike that kicked in last month.

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.

3. Sohu's crying now (Nasdaq: SOHU  ) gave Chinese dot-coms a bad name on Monday after delivering a problematic fourth quarter.

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