The 5 Dumbest Things on Wall Street: July 30

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Sands China Shifts Again

Check it out, everybody, the vacancy sign is once again flashing at Sands China. Not for a deluxe suite, of course, but in the corner office.

Sands China, the Macau unit of Las Vegas Sands (Stock Quote: LVS), said on July 23 that Chief Executive Steve Jacobs has left the organization and that the board of directors is currently on the lookout for a permanent replacement.

The company did not offer a reason for Jacobs' departure, although his reportedly rocky relationship with CEO Sheldon Adelson was rumored to have played a major part in his leaving. Michael Leven, Las Vegas Sands' chief operating officer, will take over Jacobs' duties for the time being.

We say Leven would be better off playing drums for Spinal Tap than staying on too long as Adelson's point man in Macau. He may risk spontaneous combustion, but at least he would have greater career longevity.

Earlier this year, Sands China executive director Stephen Weaver left for personal reasons. And a pair of executives of another Las Vegas Sands unit in Asia, Singapore's Marina Bay Sands, left the company last August.

That's more than enough movement for us to know that the Sands will continue to shift in China, at least until Adelson stops blowing hot and cold.

Dumb-o-meter score: 75 -- Not since Jack Nicholson took over the Overlook Hotel in The Shining have so many hotel employees faced the ax.

 

 

BancorpSouth's Bad Month

Poor BancorpSouth (Stock Quote: BXS). The future looked so promising for the bank at the start of July, and then things just went, well, south.

Shares of the regional lender fell over 17% a week ago after the company reported a second-quarter loss of $12.6 million, or 15 cents a share, primarily due to a 28% spike in nonperforming assets. The average estimate of analysts polled by Thomson Reuters was for a profit of 23 cents a share.

Moreover, judging from the earnings report, the bank will likely be dogged by bad loans for a long time. BancorpSouth recorded a $62.4 million provision for credit losses in the latest quarter, along with an $8.2 million writedown of its mortgage servicing rights.

What a shame -- and neck-breaking turnaround -- from where the company was positioned three weeks ago.

On July 2, Bank of America initiated coverage of BancorpSouth, then trading above $17 a share, with a buy rating and a $22 price target. Said BofA's analyst at the time, "The recent market pullback and late-developing credit issues have presented an opportunity to buy what we regard as a high-quality institution at a valuation last reached at the depth of the financial crisis."

Fast forward to Monday, and the same analyst is singing a wildly different tune, with the stock struggling to stay above $14.

"We are lowering our rating on BancorpSouth to Neutral from Buy, as increasing nonperforming assets indicate credit losses are likely to continue to weigh on earnings and capital for the next several quarters," wrote the analyst.

Wait a second! If Bank of America loved the stock at $17, shouldn't they love it even more at the cheaper price of $14?

Maybe next month. Dumb-o-meter score: 80 -- BofA's bank analyst was not the only one doing an incomprehensible about-face in July. Hedge fund guru Barton Biggs went from grizzly bear to raging bull in the same three-week period.

 

 

comScore's Miscount

Considering the crux of their business is counting Web page views, one would think that comScore (Stock Quote: SCOR) would be able to keep score. Sadly, that doesn't seem to be the case.

ComScore admitted on Tuesday that it underreported the number of Yahoo! page views by U.S. Internet users in June by more than 1 billion. The Internet traffic-counter also copped to misreporting the amount of time Internet users spent on Yahoo! sites after discovering a processing error it claims was confined to Yahoo.

Visitors to Yahoo! sites sank by 4.7% last month, as opposed to the 7.4% drop originally reported, according to Yahoo!.

Hmm. A decline of 7.4% vs. 4.7%? OK. Maybe they just transposed the numbers. That's an understandable mistake.

Visitor duration fell 4.3%, instead of the 6.4% first reported, a difference of more than 850 million minutes.

Nah. That's just dumb.

Linda Boland Abraham, comScore executive vice president of marketing, said in a statement on the company's Web site that the Yahoo! screw-up was an "isolated, one-time error" and that the company has identified a process to prevent it from happening again.

Yahoo! CEO Carol Bartz, who has been known to use an expletive or two in the heat of corporate battle, graciously accepted the company's apology, adding that Yahoo! is "fully prepared to work collaboratively with comScore" to sort out the mess.

At least that's what Bartz said publicly. Behind closed doors she probably dropped as many F-bombs as comScore dropped Yahoo! page views.

Dumb-o-meter score: 85 -- Those pencil-necks at comScore better sharpen their pencils. Page views are a big deal!

 

 

Dumb Bell Ringers

The Five Dumbest Lab did not have to travel too far to find stupidity on Wall Street this week. We just hopped over to the New York Stock Exchange on Tuesday to see the cast of MTV's Jersey Shore in action.

Yep, the honor -- or what used to be an honor -- of ringing the opening bell went to a group of tanned and toned dumbbells.

Nicole "Snooki" Polizzi gave a "thumbs up" to a packed house of brokers and gawkers before kicking off the trading day. Fellow cast members Paulie DelVecchio and Vinny Guadagnino pumped their fists in the air, and the rest of the group applauded.

MTV, which is owned by Viacom (Stock Quote: VIA.B), created a gold mine with its reality television series and made stars out of Angelina, Jenni "J-Woww," Mike "The Situation," Nicole "Snooki," DJ Pauly D, Ronnie, Sammi "Sweetheart" and Vinny. The season finale of Jersey Shore broke records for MTV, garnering a 4.8 rating. Season 2 of the show aired Thursday, with the cast hitting the beaches of Miami.

CNBC's Mark Haines said they attempted to interview "the ringers of the bell," but the cast's publicists declined the invitation. "They're allowed to stand and smile, they're not allowed to talk," said CNBC's anchor.

Their reticence probably has something to do with their acrimonious contract negotiations, which reportedly wrapped up last week. The hard bodies turned into holdouts, asking for $30,000 per episode in season 3, up from last year's $10,000 a show.

Clearly these self-proclaimed guidos and guidettes aren't giving anything away anymore. Not even an interview.

On second thought, maybe they aren't so dumb after all.

Dumb-o-meter score: 90 -- On third thought, yeah, they really are that dumb. That's no TV act.

 

 

GE's Jive

Sorry General Electric (Stock Quote: GE), but we don't salute you or your petty profiteering.

GE agreed Tuesday to pay a total of $23.5 million to settle an investigation by the Securities and Exchange Commission into the activities of some of its non-U.S. units with regard to the United Nations Oil-for-Food program in 2000-3. The GE subsidiaries allegedly gave cash and goods worth $3.6 million to the Iraqi government in return for 18 contracts to supply medical and water equipment.

GE didn't admit fault in the settlement, which was announced simultaneously to the disclosure of the charges. That's for those of you wondering how come you hadn't heard about GE's chicanery before this week.

The $23.5 million sum breaks down to a $1 million fine and the disgorgement of $22.5 million in profits plus interest. GE, meanwhile, recently reported net income of $3.3 billion in its latest quarter.

That's for those of you wondering how insignificant the SEC's wrist slap is in the grand scheme of GE's business.

Look, we understand that GE was not alone in using kickbacks to secure business under the scandal-ridden humanitarian aid program. And they are not the only American industrial company to settle with the SEC for their misdeeds.

Still, the whole episode leaves a bad taste in our mouths. GE sloughed off this latest infraction as a minor case of bad bookkeeping in the same puffed-up way it paid the SEC $50 million last summer to resolve fraud charges relating to hedging activities in 2002 and 2003.

By the way, GE didn't admit or deny wrongdoing back then either.

Just in case you were wondering.

Dumb-o-meter score: 95 -- So much for Six Sigma. GE should try Seven Sigma instead. Maybe Eight.

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