Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. Turning the page on Chapter 10
Midway Games filed for bankruptcy protection. Cable television provider Charter Communications will file for Chapter 11. Sirius XM Radio
Shares of Sirius XM have been on a rollercoaster ride heading into next week's repayment of nearly $175 million in debt that is due on Tuesday. Things heated up when reports of prospective suitors like EchoStar
Investors -- though they're really speculators at this point -- are staring at feast or famine next week.
2. Radio pity
You can't teach a new media company old media tricks. Google
Some will argue that Google never belonged in fading media platforms like print and terrestrial radio, but I disagree. If Google wants to grow to become the ultimate one-stop solution for sponsors, it makes sense to be the king of all medias.
It's a rough advertising market these days, I know, but this should have been the moment where a cash-rich company like Google got aggressive about growing its share of the ad market.
3. Back in BlackBerry
Wall Street slammed shares of Research in Motion
This time it's the market that has it wrong. RIM also projected that it will close out the quarter with 3.5 million more BlackBerry users than when it started, well ahead of its original net new subscriber target of 2.9 million. I'm not going to rip into a pioneer like RIM for the temporary sting of contracting margins when it is hooking smart phone users to long-term contracts.
Silly market, you just gave smart investors the perfect opportunity to finally buy into RIM.
4. Venti-size me
It starts. Starbucks
Some will argue that Starbucks didn't have much of a choice. Customers were defecting in droves, wooed by breakfast specials at burger joints and doughnut shops. However, discounting is a slippery slope. Once you go downmarket, it's hard to climb your way back up.
In other words, Starbucks will never be what it used to be. Maybe it can kidnap Grimace to be its new spokesman.
5. Playtime is over
It was fun while it lasted, Hasbro
Revenue fell by 5% during the crucial holiday quarter, with earnings taking an even bigger 30% hit. Hasbro had been a standout among conventional toy manufacturers, but now it seems as if it, too, is feeling the pressure of penny-pinching parents and kids preferring video games to board games. Maybe it should send out Sorry board games to its shareholders. It's the thought that counts.
Let's beat the dumb drum:
- Last week's bonehead moves.
- The previous week's dummies.
- Last year's silliest CEO quotes.