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. Hurd on the street
Now you're just embarrassing yourself, Hewlett-Packard
The tech giant is suing Mark Hurd over the former HP CEO's decision to work for Oracle
What's the problem here? There wasn't a non-compete clause in Hurd's chunky severance. After his success in turning HP around, surely the company had to know that it wouldn't be long before Hurd found a new gig.
This is dumb on many different levels. For starters, it reopens the wounds of last month's scandal. If HP wants the market to move on, it may as well lead by example. HP also picked the wrong enemy in Larry Ellison. His charisma, ego, and tenacity to fight in public are huge.
"Oracle has long viewed HP as an important partner," Ellison noted in a statement issued shortly after HP showed its teeth. "By filing this vindictive lawsuit against Oracle and Mark Hurd, the HP board is acting with utter disregard for that partnership, our joint customers, and their own shareholders and employees. The HP Board is making it virtually impossible for Oracle and HP to continue to cooperate and work together in the IT marketplace."
This sounds like war. Knowing Ellison, it may be what he planned on all along -- and HP just fell right into his trap.
2. Delisting the A-list is a B-list move
Silly Nasdaq! Listing compliance requirements are for kids.
Trucking giant YRC's stock has been trading below the $1 mark for several months, forcing a hearing next month after Nasdaq's 180-day grace period ran out.
It would make perfect sense for the exchange to yank listings of illiquid penny stocks, but YRC has 1.1 billion shares outstanding, resulting in a healthy market cap of roughly $300 million. It's also carrying around $1.2 billion in debt on its balance sheet, tagging the company with a 10-figure enterprise value.
3. Burnt CIENA
You can't judge a company by its revenue growth.
That isn't why Ciena makes this week's list. The networking specialist is completely upfront about the acquired boost. No, the reason why Ciena makes the "dumb" cut is because, as fellow Fool Anders Bylund points out, losses actually widened during the quarter -- even on a non-GAAP basis.
4. Stop me if you've read this one before
Barnes & Noble
It's only natural for a board to fight for its life, nixing buyout chances that may take shareholders out at a premium. It's still stupid. Despite widening losses, falling comps, and a price war it can only lose when its comes to digital readers, someone actually wants to buy the superstore chain -- or at least take control of the bookseller to make it more attractive to a potential suitor -- and B&N really thinks that shareholders will vote that down?
If they're well-read -- as all B&N shareholders should be -- they'll kill the poison pill provision at this month's annual meeting. An exit strategy now is likely to be more attractive than the alternatives after digital distribution makes physical bookstores less relevant with every passing chapter.
5. There's an "oh" in the middle of Sohu
A pickup in mergers is creating some incredulous buyout rumors. One of this week's head-scratchers is chatter that Baidu
Who starts this stuff? Baidu already commands roughly two-thirds of China's search market, and Sohu's Sogou engine is a small fry in this space. Sohu's a heavy hitter in online gaming, but it seems that Baidu would stand more to gain by remaining agnostic in that niche -- especially now that it's allowing developers to create apps that run without leaving its portal.
Acquisitions are a sound strategy for companies running low on organic growth, but Baidu grew its revenue by 74% in its latest quarter. It also doesn't have a history of going on buying binges, especially for companies as large as Sohu, with its $2 billion market cap.
C'mon, folks. We deserve better fake rumor mongers.
Which of these five moves do you think is the dumbest? Share your thoughts in the comment box below.
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Longtime Fool contributor Rick Munarriz is a fan of dumb and smart business moves. Investors can learn plenty from both. 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. The Fool has a disclosure policy.