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. Splitting headache
CEO Reed Hastings apologized for botching the way he communicated the company's new pricing strategy -- only to tell his customers to get packing. In a few weeks, Netflix will split its operation into two completely separate sites.
Netflix.com will remain the hub for Netflix's streaming plan, but its DVD-by-mail accounts will migrate to Qwikster.com.
Yes, the name is silly. It sounds like some lame comic book villain. However, I'm sure that Twitter and Facebook sounded pretty absurd at first.
I get what Netflix is doing. I can see how Netflix.com could become a global streaming brand, without any confusion of regional distribution centers. However, Netflix isn't treating its disc lovers right. Raising prices by as much as 60% for accounts on dual plans was bad enough, but now it's shooing them away to launch a new brand?
This isn't a negligible audience. Netflix estimates that 14.2 million of its 24 million domestic subscribers still receive optical discs by mail. Why give them another reason to bolt, especially when 12 million also pay $7.99 a month more to stream through Netflix.com?
On Thursday, Netflix announced that subscribers will be able to share what they're watching through Facebook in 43 of its 44 countries. Guess who's the lone holdout? Hint: Get all patriotic, and start up the "USA" chant.
2. Green can be mean
Irony alert of the week: JinkoSolar
Shares of JinkoSolar tumbled 28% Monday, worsening a brutal run for investors. The stock traded as high as $41.75 10 months ago, but now is struggling to claw its way out of the single digits.
3. Holy moly!
Rare-earth metals mania has been crashing down to earth lately. Molycorp
The analyst didn't simply go from overweight to neutral on the shares. Gambardella also hacked away at the stock's price target and his profit estimates. JPMorgan's new price target on Molycorp is $66, a far cry from its former $105.
Gambardella argues that previous speculation drove up the cost of rare-earth metals, but that now, saner trends will drive those prices lower.
4. The HP weigh
I'm getting a kick out of watching all of the TouchPads on sale at eBay. It seems as if the mad scramble for $99 Hewlett-Packard
If that's not enough of an ominous sign for the webOS platform, which HP acquired after buying Palm for roughly $1 billion, check the parking lot. AllThingsD reports this week that the tech giant is laying off more than 500 employees from its Palm division.
If you think that I'll dig into HP's decision to bring on Meg Whitman as its new CEO last night, you're wrong. It was time for Leo Apotheker to go. However, let's hope that the compensation committee isn't fouling up the way it did with Apotheker. According to CNNMoney, the now ex-CEO will walk away with $7.2 million in cash as severance, and another $18 million more in HP stock. When did incompetence become a get-rich-quick scheme?
The current compensation committee -- specifically, Lawrence T. Babbio, Jr., John H. Hammergren, and Patricia F. Russo -- owe it to shareholders like me to take better care of our money. See, Nell Minow? We're listening.
5. Big Brother meets Madison Avenue
Dashboard technology may make us safer and provide greater entertainment, but can automakers go too far?
Even if the data don't identify you personally, you may not want advertisers knowing your location, driving speed, and safety belt usage in order to more effectively market to you. With so many cars rolling out new telematics technology that does a lot of what GM does without the monthly OnStar fees, this is the wrong time to get on the wrong side of consumers' goodwill.
If GM doesn't realize that, it may want to check out Netflix's stock chart over the past two months.
If you want to track these companies for future dumb mistakes, consider adding them to My Watchlist.
Motley Fool newsletter services have recommended buying shares of Netflix and General Motors, and creating a bear put spread position in Netflix. 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. The Motley Fool has a disclosure policy.
Longtime Fool contributor Rick Munarriz calls them like he sees them. He does not own shares in any of the stocks in this story, except for Netflix and HP. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.