Tuesday's Worst Stocks in the World

Bad days. We all have them; some of us deserve them. Here are five stocks whose naughty ways drew investors' scorn on Tuesday:

Naughty?
Well, OK, we can't exactly call these stocks naughty. There are days when five-star winners and Motley Fool newsletter recommendations appear on this list. Today isn't one of those days.

If you're an investor, you'll have plenty of bad days. The trick is to avoid dating -- or, worse, marrying -- your losers. That's why I listen when our 100,000-person-strong Motley Fool CAPS community of stock pickers speaks with a poor rating or a negative pitch. You should, too.

Thus, here is today's list of the worst stocks in the world.

Worse
We begin with State Street, a former guest in this column that yesterday told investors that it's still working through $2 billion in unrealized investment losses. State Street disclosed the deficit last month.

To investors, the lack of progress suggests that the crumbling credit market that helped to create the losses has yet to recover. CAPS investor glenvar said it best last summer. Quoting:

... State Street has exposure to $22 billion [in] asset backed commercial paper conduits. This is the type of thing that has brought down one German bank and has other European banks reeling. The CP market has in effect dried up due to the risk in these asset-backed conduits.

I sure hope not.

Worser
Next up is ValueVision Media. The owner and operator of shopping channel ShopNBC badly missed estimates in reporting preliminary first-quarter results Monday after market close.

The company is struggling to compete with IAC's (Nasdaq: IACI) soon-to-be-spun-off Home Shopping Network. Executives expect revenue to decline 17% in Q1, resulting in an $18 million net loss. ValueVision booked a $34 million profit last year at this time.

At least management realizes there's work to do. Quoting Chairman John Buck from a company statement:

Our results in the first quarter were disappointing and considerably below expectations. Like many other retailers, we continued to face a difficult consumer economy and a slowdown in discretionary spending. We also began shifting away from consumer electronics, a category which drives top-line sales, but typically results in one-time customers who contribute less to long-term success. ... In addition, to reduce inventory levels of high-ticket jewelry items, we took aggressive clearance markdowns at the end of the first quarter, which reduced margins.

Ouch.

Worst
But our winner is Hoku Scientific, which yesterday announced that it will turn away from Merrill Lynch (NYSE: MER) and toward the capital markets for the estimated $110 million it needs to build facilities for polysilicon production.

At least one analyst commenting on the deal said Hoku's cash flow -- or, more precisely, its lack thereof -- may have contributed to the decision to choose equity over debt financing. I agree.

Hoku had $29.8 million in cash and investments on its balance sheet as of March 31, up from $19.9 million at the same point a year ago. Yet that's probably not as impressive as it sounds. On the balance sheet, Hoku shows a $15 million increase in "deposits," which, according to SEC filings, represent advance payments for work toward polysilicon production.

Translation: It's "financing;" money supplied by partners rather than a bank or shareholders.

My guess is that Merrill, facing down a global credit crunch, demanded terms that cash-constrained Hoku couldn't agree to.

Hoku Scientific and its down-with-debt-up-with-dilution dilemma ... Tuesday's Worst Stock in the CAPS World.

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I'll be back tomorrow with more stock horror stories.