Retracted bids, doughnut bibs, and big farewells helped spark the week that was.
If the leading auctioneer bends, will it break?
It seemed like just another one of eBay's (NASDAQ:EBAY) fee hikes when the usual grumble of resentment grew louder. And louder. These growls were coming from eBay's active power sellers, since the increases were targeting eBay Stores merchants. So in a rare concession, eBay offered an olive branch to its selling community by scaling back on one of its increases while issuing a rent rebate for those who stick around.
The whole thing was just a bad move. Raising fees at a time when stateside growth was slowing may not have been the brightest of initiatives, but caving in to the media backlash was even worse. The online auctioneer has now set a precedent: Holler loud enough, and eBay's knees may buckle. Pricing flexibility has disintegrated into anger management. And that's not a very comforting thought for investors paying more than 50 times 2005 earnings for a wonderful company that suddenly feels very mortal and vulnerable.
You're so vain, Carly, you probably think this story's about you
Carly Fiorina was willing to defend to the end Hewlett-Packard's (NYSE:HPQ) controversial acquisition of Compaq. Well, now the end has come, as the company's board has given the visionary CEO the boot. With HP's shares trading at a fraction of where they were five years ago -- and showing a loss during Fiorina's six-year tenure -- will she finally admit that buying Compaq was a tactical blunder?
Diluting HP's high-margin printing stronghold by scooping up the fading PC maker never seemed like a bright idea. Sales of the combined companies didn't match what they were producing on their own. The synergistic savings were real -- yet not enough to cover up the fact that HP's flagship printing business was carrying the company and its operating profits.
While Fiorina is to be commended for leaving the company in good shape with a heap of technology patents and worthy investments in radio frequency ID, she will still have to face the facts: The HP-Compaq value meal was supposed to create an entity that would rival Dell (NASDAQ:DELL) on the computing front and IBM (NYSE:IBM) on the services side. It still has a long way to go on both fronts.
It's because I can spell "konfusion" with a "k" and I can like it
Is it a cool doughnut company now? Krispy Kreme (NASDAQ:KKD) is getting busy with the brand-rebuilding process. It's axing as many as 25% of its employees and ditching the lease on its corporate jet. The move will result in a $900,000 charge but should produce savings of $10.4 million a year.
The company needs the help, after its brutal streak of bad news over the past year. A Motley Fool Stock Advisor recommendation during merrier times, Krispy Kreme has a lot to prove and -- according to its creditors -- not a whole lot of time in which to prove it. Yet these aren't just steps in the right direction. They are steps in the only direction the company can take these days. It has to move forward because what it sees in the rearview mirror is just bug-ugly right now. Next up for Krispy Kreme? Spelling lessons!
Want to read more about the stories that rocked the week that was?
Until next week, I remain,
Rick Munarriz
Longtime Fool contributor Rick Munarriz would have no problem bringing in his parents to live with his family -- but he will have to check with his wife first. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
