Cold feet, bold feats, and old cheats colored in the week that was.
And then the shoe went shoo
When Nike (NYSE:NKE) saw its brand image threatened and it knew that it would have to chew off some sales to maintain its integrity, it had three words to live by -- Just Do It. Sears (NASDAQ:SHLD) had been a steady outlet for the athletic footwear behemoth, but when the company merged with Kmart, Nike got spooked. What if some of its sneaker shipments that were earmarked for Sears wound up at its new discount-department-store sibling? Nike won't risk it. Come October, when its current contract with Sears runs out, Nike will stop selling to Sears Holdings.
Too brash, you think? Has Nike become too proud? There's nothing wrong with Kmart, is there? No, not really. However, Nike has paid tens of millions to the likes of Michael Jordan and LeBron James because it realizes the importance of brand excellence. If it wants to be associated with teens parting with large sums of disposable income, it doesn't want to have its swooshes hanging from the shoe racks of a chain that's the antithesis of luxury. It may be Nike's loss. Martha Stewart (NYSE:MSO) certainly hasn't seen its corporate image tarnished by selling housewares exclusively through Kmart. Then again, it's Nike's brand to define. It has every right to lace up and run the other way... like a Georgia bride.
If you buy into a Dutch auction, do you need to pay in guilders?
It was a bumpy, twisty road paved with shards of glass, but Morningstar (NASDAQ:MORN) finally completed its IPO. The company went with the OpenIPO platform that allocates shares through an open Dutch auction instead of the awkward favoritism that many associate with the traditional investment-banking-fueled offerings.
The stock came to market at $18.50 on Tuesday and never traded below $18.51. It has only gone up since then. It closed at $20.05 on its first day of public trading and finished Wednesday at $21.60 and Thursday at $22.64. That kind of steady price support is notable. While Google (NASDAQ:GOOG) and its quasi-auction format got many excited about the open-bidding process to disburse freshly minted shares, the OpenIPO format needed Morningstar to help smooth the road for the next batch of companies who decide to go with the consumer-direct approach to go public.
Sometimes love don't feel like it should; you make it ERTS so good
Electronic Arts (NASDAQ:ERTS) fired a warning shot, but it seems as if that wasn't enough. The company had lowered its targets for the fiscal year ending in the March quarter, and the results came in expectedly weak, but now the video game leader is looking to post a loss for the current June quarter as well.
Ouch! Yes, we're going through a lull, as new handheld systems are just starting to roll out and gamers are saving up for the next generation of video game consoles instead of building out their existing game libraries. Still, EA has seen its stock shed a quarter of its value in little more than a month. The company is still a quality player -- it truly is the class act of video gaming -- and any continued weakness may make for a compelling buying opportunity.
The headlines behind this week's stories:
Until next week, I remain,
Longtime Fool contributor Rick Munarriz thinks that Kmart should consider Jordan and LeBron as spokespersons to really give Nike a leathery heart attack. He does not own shares in any of the companies in this story. The Foo l 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.
