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. This explains the air sickness bags
There's a skirmish breaking out between airlines and travel portals. Unfortunately, it's a lose-lose-lose war.
Travel-seeking consumers will begin to doubt that they are getting complete snapshots of their flight options, even though several popular sites are still on good terms with AMR. The lack of information will also result in lower conversion rates for the portals and greater pricing volatility and booking uncertainty for the carriers.
There were reports that AMR and Expedia were hammering out their differences, but now travel information site Sabre has jumped into the fray by penalizing AMR's listings.
The bumpy flight continues.
2. Start living up to your name, Best Buy
Would you pay Best Buy
Best Buy was rumored to begin offering Buy Back protection this week. It hasn't been made official, though a Best Buy statement to an Orlando news station confirms that the offering is real and on the way.
If I want to buy a tablet and sell it back for half of its price within the first six months, why do I need to pay a premium over that at the time of the original purchase? Best Buy may be billing this as obsolescence insurance, but it's starting to feel more like those maintenance agreements that rarely make financial sense.
I'm sure that a $500 laptop I buy today won't be worth much by the summer of 2012, but I'm sure I can get more than $100 for it without having to pay an upfront premium.
3. Adding injury to insult
When it was revealed this week that Goldman Sachs
Goldman was simply overpaying so it would have first dibs on being lead underwriter in the eventual IPO. How can Facebook be worth $50 billion? However, then Goldman began selling shares to its prized clients, initially without a whole lot of insight into Facebook's actual financials.
Yikes! If Goldman Sachs were my Facebook friend, I would be defriending it about now.
4. It's never too late to hit the reset button
Positive comps can still be a negative for GameStop
Shares of the video game retailer fell by 6% yesterday, after announcing a 3.4% uptick in comps during the nine-week holiday season.
The performance isn't as upbeat as you may think. GameStop's comps tanked 8.6% during the 2009 holiday season, so the chain is still far behind where it was two years ago at the store level.
This was also the quarter in which gamers everywhere were snapping up Kinect motion-based sensors and a record number of Activision Blizzard's
Put all that together and a negative reaction to positive sales makes perfect sense.
5. Apple's wake-up call
I jest, but Apple did have a rare embarrassing episode when non-recurring alarms failed to go off on updated iPhone 4 smartphones after New Year's Day. The problem was remedied by Monday, but this is also the same model that forced Apple to distribute free cases to tackle an antenna reception problem during the first few months of last year's release.
This incident is minor in comparison, but Apple needs to be careful. Too many flubs and you eat into brand premiums and create gun-shy early adopters.
Which of these five moves do you think is the dumbest? Share your thoughts in the comment box below.
Best Buy is a Motley Fool Inside Value choice. Apple, Activision Blizzard, and Best Buy are Motley Fool Stock Advisor selections. The Fool has written puts on Apple. Motley Fool Options has recommended a synthetic long position on Activision Blizzard, buying calls on Best Buy, and writing covered calls on GameStop. The Fool owns shares of Activision Blizzard, Apple, Best Buy, and GameStop. 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. 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.