Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. Let's take a look at five dumb financial events this week that may make your head spin.
1. From hanging chads to dangling Yangs
Oh, what a difference a week makes. A dissident shareholder questioned the tally's validity and the recount showed that Yang received just 66.3% of the vote. The recount also finds board chairman Roy Bostock commanding just 60.4% of the shareholder support. Yes, we're still talking about a majority in both cases, but it certainly forces Yahoo! to act sooner rather than later to quell the disenchantment.
2. Maybe the third time's the charm
Sirius XM Radio
Insider buying is typically a sign of internal confidence, but there's a problem with Karmazin putting his money where his mouth is. See, he's been wrong before. He picked up 1.5 million shares of Sirius -- at $5.36 apiece -- when he joined the company four years ago. He was back two years later, buying another million shares when the stock was at $6.20. Sooner or later, he's going to be right, but investors should know that he's no Warren Buffett in calling attractive entry points.
3. No tea for two, but how about a cool drink for two dollars?
This move comes in various shades of dumbness.
- It devalues the grande iced drinks.
- Consumers may tire of making repeat visits.
- The chances of higher-margin add-on purchases in the afternoon are slim, since no one is going to order a warm latte to go with the iced coffee.
- Patrons who feel they won't be back in the afternoon may feel that they are subsidizing the double-dippers, and stay away the first time on principle.
- It trains customers to expect deals, leaving the premium coffee brewer to go back to markdowns in a new way next month.
Starbucks fans will no doubt see it differently, but that's the problem with viewing life through mocha-tinted glasses. The only real $2 bargain in premium coffee would be shares of troubled rival Caribou Coffee
4. Like a Whole in the head
Sorry, Whole Foods Market
The surprise here is that sales trends -- overall and even at the store level -- are still positive. Whole Foods is still profitable, even as analysts scale back their expectations. Why would it kill its dividend, scaring away yield-chasing value investors after its lackluster financial performance has shooed away growth investors?
5. More apps than an Applebee's menu
Even if it's a drag on AT&T's network or gets in the way of stand-alone wireless broadband plans, AT&T would be nuts to get in the way (if it is, in fact, the reason the app has been pulled). It's the killer app that would make the iPhone even more desirable, and AT&T still has stateside exclusivity.
How does that old AT&T jingle go again? Reach out, reach out and crush someone?
Let's beat the dumb drum:
Starbucks is a Motley Fool Inside Value pick. Whole Foods Market, Starbucks, and Apple are Motley Fool Stock Advisor picks. The Fool owns shares of Starbucks. 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. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.