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. Square haircuts
Hoping to lure shoppers to its empty department stores, J.C. Penney
CEO Ron Johnson may have arrived with plenty of hope and hype late last year, but February's poorly received "fair and square" makeover has been a disaster. Comps fell 21.7% in its most recent fiscal quarter, after an equally grim 18.9% slide the quarter before that.
J.C. Penney offered free haircuts on Sundays for kids through August's back-to-school shopping season, delivering 1.6 million free dos. It must've worked if the struggling retailer is bringing it back come November, but this sounds like a losing bet.
Are parents willing to put up with long lines for free haircuts really the kind of shoppers a store should be targeting? Freeloaders are unlikely to be hitting the registers on the way out, especially with tired kids in tow. You also have to wonder if the move will scare away regular shoppers that may be turned off by a store brimming with young kids.
The Wii U finally has a price and a release date.
Nintendo's (NASDAQOTH: NTDOY.PK) new console will hit the market at $300 and $350 price points on Nov. 18.
There's nothing wrong with the timing. Nintendo will be upgrading the tired six-year old Wii just in time for the crucial holiday shopping season. It's also at least a year ahead of the competition in terms of pushing out its next-generation platform. Unfortunately, the price points are just out of touch with what consumers expect to pay for their video game systems these days.
When Wii turned heads in 2006, its $250 price tag made it nearly half as expensive as the PS3 and Xbox 360. The iPhone didn't exist. Tablets didn't exist.
However, price cuts have taken down the costs of the rival consoles to the point where Wii U will be the priciest system on the market. There are also cheaper smartphones and Android tablets on the market, and that's the way many players that aren't diehard gamers are choosing to spend their gaming time.
Tack on a second GamePad controller and the price rockets past $450. Really, Nintendo?
3. Bleeding purple
The latest market share data from comScore shows four of the country's five largest search providers gaining market share. Yahoo! is the only one going the wrong way. The dot-com pioneer has seen its chunk of the search market shrink from 16.3% to 12.8% over the past year. Everybody else is gaining ground at Yahoo!'s expense.
This is just another reminder at how dumb it was for Yahoo! to hand over its search business to Bing a couple of years ago. Yahoo! chased the steady flow of high-margin payments from Mr. Softy without fully considering the public's fading perception of Yahoo! as a search hub.
Jeff Karp -- the social gaming leader's chief revenue and marketing officer -- is the latest key employee to leave the company.
Is it Zynga's shrinking share price or the challenging nature of casual online games leading to the exodus? Zynga better figure it out.
5. Cracking skulls
Analyst Jay Sole was disheartened after channel checks showed deep discounting for the company's audio accessories across several retailers. His price target is dropping from $21 to $15, and he's also lowering his profit estimates for 2012 and 2013.
Sole points to Beats by Dr. Dre headphones taking more market share than the analyst was expecting, but it can't be a coincidence that the report comes out a day after the new iPhone and iPod EarPods were introduced.
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