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. Wii will rock you
The pipeline at Nintendo (OTC BB: NTDOY.PK) is clogged, and even a pair of mustachioed super-plumbers can't clear it out.
The once-trendy gaming giant announced that its 3DS -- the 3-D version of its popular portable DS line -- won't be out until early next year. Missing the critical holiday season is huge for the kid-friendly handheld.
Worse yet, Nintendo is also hosing down its near-term guidance. The 3DS delay is partly to blame, but the company isn't doing so hot in the present. Rival console makers are rolling out their own motion-activated controllers this year. Checking the best-seller list on Amazon.com yesterday, I was floored to find not a single Nintendo title among the 15 most ordered or preordered games or accessories.
2. Spacing out
Dot-com giants don't know what they've got until it's gone.
Microsoft
Silly me. I thought online heavyweights with search engines and advertising platforms would like to have as much content under their watch as possible.
No one is buying Microsoft's claim that there are 30 million active bloggers on Spaces. Most of those likely abandoned their musings a long time ago. However, killing off a source of free content -- whether it's editorially vetted or not -- is nonsensical.
3. Java bad day
Shares of Green Mountain Coffee Roasters
An investigation isn't fatal. Accounting irregularities don't have to be malicious or deceptive. However, the announcement does create a cloud of uncertainty over the company behind the popular Keurig and its K-Cup refills.
Green Mountain was already trading at lofty multiples, given its story-stock appeal. This investigation will likely slap a cap on that enthusiasm.
4. Liberty of the cease
Liberty Mutual decided to can its IPO, on the very eve that it was set to go public. The property and casualty insurer blamed market volatility for postponing its offering, but September was a rocking good month for equities.
It was also a surprisingly strong month for IPOs. All five of the companies that went public in September piled on healthy gains. Country Style Cooking
Liberty Mutual can always argue that none of the September winners were stateside insurers, but is the climate really that bad? It's not as if we're burning the GEICO gecko in effigy. The real problem here appears to be that Liberty Mutual was trying to raise as much as $1.3 billion by moving 64.3 million shares -- a bigger offering, perhaps, than the market could tolerate.
5. Tesla whirls
Shares of Tesla Motors
I'm not sure I share their calm. It's true that Tesla has a hot brand, strong tech connections, and a strong automaker partner in Toyota. However, it seems as if every couple of days, a new competitor signs up to join the eventual showroom of hybrid and electric vehicles.
Who knows how competitive this space will be by the time that Tesla hits the market with its first somewhat accessible car -- the Model S sedan -- in two years? That uncertainty may explain why Tesla's shares have given up roughly a third of their euphoric highs after the company's wildly successful summertime IPO.
But, hey, at least Tesla had the gumption to put the pedal to the metal and complete its offering. Isn't that right, Liberty Mutual?
Which of these five moves do you think is the dumbest? Share your thoughts in the comments box below.
