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. When two takes aren't enough
There may not be a lot that's sexy about distribution or the creation of in-store promotional displays, but Take-Two is in no position to be shrinking after warning investors to expect a loss in fiscal 2010.
Naturally, this move may also lead one to consider whether things are even worse at Take-Two, and it's simply taking the opportunity of the sale to rework its targets even lower.
2. Google can't win 'em all
Yelp has apparently walked away from a Google
Google will be fine. It continues to pad its war chest, now at $22 billion and counting. One has to wonder what Yelp was thinking, though.
For every Facebook that turns down a dot-com suitor and winds up growing in prominence (and value), you have countless shells of online darlings that should have swallowed a little pride.
Yelp clearly has a hot hand at the moment. It's a popular community site, loaded with reviews of restaurants and other local businesses. However, online success can be a revolving door. Perhaps more importantly, if Google was willing to spend $500 million on Yelp, its interest is a good indicator that Google will enter this market -- and pose a competitive threat to Yelp.
3. From buffet to Buffett
Steak n Shake
Then it truly showed its Warren Buffett ambitions when it announced its intentions to acquire a small Michigan-based insurer on Monday night.
"Simply because profits are generated in the restaurant business doesn't mean the money must be reinvested there," the company's chairman wrote earlier this month in his annual letter to shareholders.
He's right, but at what point does diversification fall into the realm that Peter Lynch coined as diworsification? Just because Buffett successfully transformed his company into a diversified holding company with a strong insurer base, that doesn't mean we can all be Buffett.
4. More subtraction by subtraction at Yahoo!
Yahoo! needs to get its cost structure in line with its rivals, but getting rid of the sticky apps is only going to alienate its loyal users.
When will the Yahooligans learn?
5. Microsoft can't win 'em all
Mr. Softy was denied an appeal in its legal defeat of a case pertaining to i4i, a seldom-used feature in Word 2007 and Office 2007. The company won't be able to sell Office come Jan. 11 unless it removes the feature.
This may not seem like a big deal, since Microsoft is readying the move to its Office 2010 suite, which does not have the feature, and developers have also had several months to remove it. Microsoft also has enough cash in the bank to pay out the judgment. However, even with enough money to hire the best lawyers, Microsoft was still smacked down by a wee entity.
Maybe it's time to punch in "David vs. Goliath" in Bing.
Let's beat the Dumb Drum:
Google and Take-Two Interactive Software are Motley Fool Rule Breakers selections. Berkshire Hathaway is a Motley Fool Stock Advisor recommendation. Berkshire Hathaway and Microsoft are Motley Fool Inside Value picks. Motley Fool Options has recommended diagonal calls on Microsoft. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services, free for 30 days. That certainly wouldn't be a dumb move.
Longtime Fool contributor Rick Munarriz is a fan of dumb and smart business moves alike, since investors can learn plenty from both. He is part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.