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. Even China has a dot-com bubble
Chinese Internet stocks took a one-two punch in the gut
this week, with
Sohu.com (Nasdaq: SOHU) and
Baidu (Nasdaq: BIDU) delivering
grim outlooksfor the current quarter.
Baidu is expecting a rare sequential dip in revenue, as it
migrates advertisers to a new ad platform. Sohu is
forecasting a sequential slide on the bottom line, given the
meandering state of brand advertising (yes, even in
China).
The pounding is painful, since both companies did their
part by posting better-than-expected third-quarter results.
However, the market is always more concerned about what it
sees through the windshield than what if finds in the
rearview mirror.
2. K-SEA and the sunshine banned
Shares of
K-SEA Transportation Partners (NYSE: KSP) got
drilled on Wednesday, after the petroleum transporter hit
investors with a deluge of bad news.
I can see why fuel-related companies were smarting earlier
this year, when energy prices were tanking, but it's hard to
justify disappointing news now that crude oil prices have
bounced back.
3. If you build it, they will dot-com
Yahoo! (Nasdaq: YHOO) should probably stop
buying its full-body-length mirrors from abandoned carnival
funhouses. The sluggish dot-com is still bent on building a
new campus that would span 13 buildings and 3 million square
feet.
I'm all for cash-rich companies that want to move into
cozier digs, but this is a bit much. The new headquarters
would be able to house twice as many employees as the current
Silicon Valley hub. Isn't it more than likely that Yahoo!
will be smaller, not larger, in a few years? Outsourcing its
paid search and
axing its traffic-generating sites(farewell, GeoCities)
aren't the actions of a company going through growing
pains.
4. The E*TRADE Baby needs a new diaper
Even a healthy market rally hasn't been enough to bail
out
E*TRADE (Nasdaq: ETFC), as the discount
broker posted its
ninth consecutive quarterly loss. Accentuating the red
ink, rival
TD AMERITRADE (Nasdaq: AMTD) posted a healthy
profit a few hours earlier.
I have sung E*TRADE's praises in the past. I have
applauded the clever baby-backed marketing campaign, debt
restructuring, and brokerage account growth. However, the end
result of the company's recapitalization efforts is that it
now has more than twice as many shares outstanding than it
did a year ago. In other words, the stock may have shed
nearly half of its value over the past year, but its market
cap has risen.
Watching TD AMERITRADE post rosy bottom-line growth
prospects for its brand new fiscal year has me wondering when
E*TRADE will turn the corner and become the profitable
company it can -- and should -- be at this point.
5. Music to Google's ears?
There's a lot of hype behind
Google 's (Nasdaq: GOOG) move to beef up its
music-search abilities. Let's turn down the volume. Continued... |