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.
Gamers love cockiness and bravado, but sometimes a company can go too far.
In an interview with gaming website Kotaku, Nintendo of America president Reggie Fils-Aime somehow claimed that the popularity of gaming on Apple's
How is that even possible? He didn't stop there, though.
"If our games represent a range between snacks of entertainment and full meals depending on the type of game, (Apple's) aren't even a mouthful, in terms of the gaming experience you get," he argued.
Ouch. Does Fils-Aime realize that his own company has suffered a 23% top-line slide -- and a 41% plunge in operating profits -- through the first nine months of its fiscal year? If the popularity of cheaper casual games isn't eating into the time and money being spent on Nintendo Wii and DS systems, Fils-Aime's company has some serious problems.
2. Some like it Hot
Shares of Hot Topic
Why would the stock open higher than the actual dividend? Do Hot Topic investors realize how these special payouts go? There's no free lunch when the stock goes ex-dividend and the shares are repriced according to its weakened balance sheet.
Some may argue that introducing an actual quarterly dividend is a show of confidence, but Hot Topic also posted negative comps for the month of March, as same-store sales slipped by 7.5%. Maybe it's better off holding on to some of that money since it may need to refresh its namesake stores.
3. No one puts Bebo in a corner … except AOL
In an internal memo leaked to PaidContent.org, AOL announced its plans to unload the site that has been fading in popularity as the Facebook phenomenon continues to grow.
I have nothing against AOL's strategy to find buyers for its non-core assets, especially when it's a property that may be in demand. However, announcing desperate plans to throw in the towel on a site -- even if it's from an internal memo (since they always find a way to come out) -- isn't going to help drive a high price.
If AOL doesn't find a suitable buyer for Bebo, I hope it finds a way to keep it around. You don't look gift traffic in the mouth, especially when you can find ways to redirect traffic to the properties you do want to keep.
4. It's a boardroom cocktail
Carl Icahn wants to shake up the Genzyme
I'm all for industry knowledgeable members, but it's uncomfortable to see insiders from one drug company strategizing in the boardroom of another. There may not be a whole lot of overlap between the two companies, but it's awkward.
5. Chinese Palm readers
Shares of Palm
Unlike some of my more bearish buds, I don't think Palm is headed to Nil City. I think someone will snap up the smartphone pioneer, and we're really just in the mother of all reverse auctions.
However, if and when it happens, it's not going to follow some magically leaked rumor. No potential buyer would send out a trial balloon that would make an acquisition pricier, and if it does leak out the suitor will just back away -- let the flurry pass -- and come back even cheaper a month later.
I believe that Palm will find a buyer later this year, but it will come when speculators least expect it.
Which of these five moves do you think is the dumbest? Share your thoughts in the comment box below.
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.