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. Debit downer
Bank of America
The move is a direct result of a new regulation that kicks in tomorrow, capping the fees that banks can charge merchants when their customers use debit cards to complete transactions. Some bank customers may have applauded the regulation initially, but they're probably singing a different tune now that the bank is turning to its clients to make up the difference.
Bank of America isn't the first company to begin slapping debit card fees on accounts as a result of the new law. However, as the public face of the TARP bailout, it's the banking giant that will be criticized the most for the move.
It will lose accounts, though it will get harder and harder to find rival banks that aren't juicing up fees after a significant revenue stream dries up.
Banks are the new airlines, folks.
2. Next time, pop a Mentos into a Diet Coke for a fizzy eruption
He argues that Chinese provinces are fighting harder for investments than individual states in this country. He also argues that the antiquated tax structure here and political gridlock aren't conducive to business, concluding that it's easier to do business in China "in many respects" than it is closer to home.
"If you talk about an American company doing business in the world today with its Chinese, Russian, European or Japanese counterparts, of course we're disadvantaged," Kent told the newspaper.
Even if you find yourself nodding in agreement, do you really want the CEO of a consumer-facing company like Coke alienating customers with comments that can easily be misconstrued as being un-American?
Before you answer, walk outside and take a look around. How do you think the average American will take Kent's comments?
3. Meg on its face
What is Hewlett-Packard
Think about that for a bit. HP's board has come under fire for the head-scratching hire of Leo Apotheker last year, and the swift push for Meg Whitman last week. Let's not even get started on the Mark Hurd fiasco that led to this rep-smacking chain of events.
Hiring an investment banker at this point is an admission that it's not comfortable that it would be able to win shareholder approval if contested by an outsider.
Please, board members, save some face and tender your resignations now.
4. Russian along
Russia's top search engine may have a selective disclosure problem on its hands.
Shares of Yandex
This is what selective disclosure laws were enacted to prevent. Hedge fund managers aren't supposed to be the first to know something that moves the stock before it trickles to the public.
Yandex is a promising company, and it still expects to grow revenue by 55% to 60% this year. It just may need to brush up on its corporate communication skills if it wants to trade on a stateside exchange.
5. Studios in glasses houses shouldn't throw stones
This will be a problem. I realize that many folks have to pay extra for 3-D glasses overseas, but stateside audience are already feeling gouged by having to pay $3 to $4 more for a multiplex screening in 3-D than for the 2-D version showing a few doors away. Box office receipts are also declining this year, and this is just the kind of thing that will push some 3-D fans over the edge.
Just wait until attendance drops for 3-D screenings next year -- or folks pay for a non-Sony 3-D movie and then just sneak in. Will it still be worth it for Sony to save the $0.50 it shells out for a pair of 3-D specs once audiences fail to embrace the spec ownership model? Sony will change its tune, unless this is part of the master plan to sell more 3-D TVs by getting people to see fewer 3-D movies at the local theater.
If you want to track these companies to make sure they don't make another dumb mistake soon, consider adding them to your personalized stock watchlist.
The Motley Fool owns shares of Bank of America and Coca-Cola. Motley Fool newsletter services have recommended buying shares of Coca-Cola. 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 as he sees them. 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.