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. Not so undisputed
Shares of THQ
Talking down prospects is an easy way to earn a spot on this weekly hit list, but THQ's timing makes its inclusion a no-brainer. THQ announced the softness the day before the E3 conference kicked off in Los Angeles, just as every video game company is scrambling to put its best foot forward.
THQ's drubbing also took place just a few days after rival Take-Two Interactive
You say "strengthening greenback." I say "weakening fundamentals."
2. Bieber Fever: Home Edition
The housing bubble has given way to the Bieber bubble. Our own Alyce Lomax took KB Home
I won't rip into Bieber or bubblegum pop in general. There's no correlation between investing acumen and a discerning taste in music. Have you checked Warren Buffett's iPod playlist? Exactly.
But KB's idea is just plain dumb. New houses are still overpriced, given the glut of available preexisting homes, and the expiring tax credits that had artificially propped up the value of fresh digs. KB Home is trying to smoke out new leads, and if your kid's a fan of Bieber, you're about to fall into its trap.
3. Farewell, Fannie & Freddie
The days of trading on the NYSE are numbered for Fannie Mae
Fannie and Freddie fell 39% and 38% respectively on Wednesday as a result of the delisting, and deservedly so. The over-the-counter bulletin board is a haven for share price volatility and wide bid-ask spreads.
The allure of penny stock prices is brutally tempting for some speculators. It doesn't matter that Freddie and Fannie lost a whopping $18.2 billion combined in their most recent quarters, or that Fannie alone is sporting $145 billion in negative book value.
There are gamblers everywhere, even outside of the ranks of Bieber fans in Las Vegas.
4. Unleashing the athleticism of the diehard gamer
Am I the only one skeptical about the notion of athletic gamers? The industry has been languishing for more than a year, partly because teens tired of strapping on fake plastic guitars and banging away on rubbery drum controllers. Now I'm supposed to believe that the ticket to a turnaround comes in the form of making folks move around to make things more realistic? In the old days, wasn't that what "going outside to play" was all about?
5. Pound cake
Get well soon, Brenda Barnes. While you're at it, get more open.
We've had cryptic medical departures at other companies before, and it's just not fair for investors to be kept in the dark. Yes, CEOs are human beings with private lives, but when conditions arise that can impact a chieftain's tenure, shareholders have a right to know.
Would it be considered insider trading if board members who know the severity -- or lack thereof -- behind a CEO's medical leaves buy or sell shares as the clueless public merely speculates? That's a question for legal eagles, but it just stinks of selective disclosure.
Which of these five moves do you think is the dumbest? Share your thoughts in the comment box below.
Take-Two Interactive is a Motley Fool Rule Breakers recommendation. Motley Fool Options has recommended a diagonal call position on Microsoft, which is a Motley Fool Inside Value pick. 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. 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.
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