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. Mickey louse
Yesterday wasn't a good day for Disney
For starters, the family entertainment giant accidentally sent out its quarterly earnings to some financial media outlets several minutes before it released it to the general public after the market close.
Adding insult to injury, the results weren't that hot. In a rare stumble since Bob Iger took over as CEO, Disney failed to exceed analysts' expectations for a fiscal fourth-quarter profit of $0.46 a share -- which would have been flat with last year's showing. Plagued by profit shortfalls at its theme-park and cable subsidiaries, Disney could only muster an adjusted profit of $0.45 a share.
Sometimes the news is so bad that it just can't wait to come out.
2. Where's my free boost?
Worryingly, comps fell by 2.7% during the quarter. Same-unit sales had declined by 5.3% in 2009 and 10.3% in 2008. The trend may seem to point toward narrower comp declines, but that's not how investors should view things. Since the declines are compounded, the smoothie chain's average store is ringing up roughly 17% less than it was during 2007's third quarter, despite adding new coffee lines, breakfast items, and oatmeal.
3. Don't redeem this coupon
Rumors that Yahoo!
Silicon Alley Insider's sources tell the tech blog that Yahoo! has told Groupon executives that it's willing to spend as much as $4 billion to acquire the popular home of city-specific flash deals.
While the acquisition may be a good way to wake up Yahoo!'s meandering performance, Groupon finished a financing round earlier this year that valued it at roughly $1.3 billion. Buying its way out of its organic malaise is fine for Yahoo!, but overpaying could be disastrous, given Groupon's surprisingly thin moat.
4. Sirius downgrade
Sirius XM Radio
Gabelli analyst Brett Harriss seems to think so. He downgraded shares of the satellite radio giant after the past few months of gains, entirely on valuation concerns. Instead, Harriss suggests buying Liberty Capital
Liberty Capital has been a compelling way to play Sirius XM since it bailed out the premium radio darling last year, but it also means that investors are banking on a stagnant cable provider, the Hallmark channel, the Atlanta Braves, and even Sirius XM CEO Mel Karmazin's former bosses at Viacom
5. Not as easy as A123
When you're a profitless maker of next-gen batteries for electric cars, there isn't a lot of wiggle room for disappointment. Investors of A123 Systems
The letdown isn't just about the numbers, since the pros expect red ink out of A123 for several more quarters. Until the country is bumper-to-bumper in electric cars running on lithium-ion battery packs, investors will forgive the losses. Unfortunately, A123 also revealed a delay in auto demand for its batteries.
That's a shock -- and not in a good way.
Which of these five moves do you think is the dumbest? Share your thoughts in the comment box below.
Walt Disney is a Motley Fool Inside Value pick and a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
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 except for Disney and Jamba. 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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