This Week’s 5 Dumbest Stock Moves: Dell Inc. (DELL), DIRECTV (DTV), Select Comfort Corp. (SCSS)

Page 1 of 2

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. I think Icahn
Carl Icahn didn’t become a billionaire by making dumb mistakes, but his move to rattle the cage at Dell Inc. (NASDAQ:DELL) has all the makings of a disaster.

Dell received a $24.2 billion offer to take the company private last month, but Icahn feels that the buyout price of $13.65 a share is too low.

Dell Inc. (NASDAQ:DELL)Simply being unhappy isn’t enough for Icahn, obviously. He’s an activist at heart, so he’s taken a stake in the fading PC maker and threatening “years of litigation” if he doesn’t get his way.

What’s his plan? Well, no one has offered to top the $24.2 billion offer, but Icahn is proposing — if the deal doesn’t pass — for Dell Inc. (NASDAQ:DELL) to pay a special dividend of $9 a share. Dell Inc. (NASDAQ:DELL) obviously doesn’t have that kind of money, so it would have to take on new debt to make it happen.

Really?

Dell’s behind the times, and it’s too late in a world that has eased up on PCs over the past two years. Analysts see revenue slipping again this year, with profitability taking an even bigger hit. Taking on more debt is the last thing that Dell Inc. (NASDAQ:DELL) needs right now.

2. Fumbling away an opportunity
DIRECTV (NASDAQ:DTV) may not realize that its exclusive deal with the NFL to air every regular season game in its entirety is perhaps the only reason why it’s able to command such a lofty premium over rival satellite television and most cable providers.

Speaking at Deutsche Bank Media, Internet & Telecom Conference in Florida this week, DIRECTV (NASDAQ:DTV) CFO Pat Doyle — as retold in Hollywood Reporter — said that the company is weighing changes to its NFL Sunday Ticket when it comes up for renewal.

The NFL is likely to command a princely ransom when the current deal expires in 2015, and Doyle said that the satellite television giant is considering striking a cheaper non-exclusive deal with the football league or dropping the package altogether.

Yikes. Maybe Doyle is merely negotiating in public, but at a time when live sports programming is about the only thing keeping many homes from cutting the cord with pay TV providers, it would be a devastating blow for DIRECTV (NASDAQ:DTV) to lose the one thing that sets it apart from everybody else.

3. Letting the bed bugs bite
In a week when the market was rallying to fresh all-time heights, shares of Select Comfort Corp. (NASDAQ:SCSS) hit a new 52-week low after posting a disappointing sales update.

The company behind the Sleep Number air-chambered mattress warned that sales have been soft since the beginning of last month. Unlike its beds, there’s little that Select Comfort can do to adjust that firmness.

“We believe this is a short-term issue associated with accelerated changes made to our media-buying strategy, and we are making the necessary corrections to both media buying and near-term expenses,” Select Comfort’s CEO said.

You don’t buy that? Well, Wall Street didn’t buy it either.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Click here to Read Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 74 percentage points in 2.5 years. Our beta is only 1.2 (download a FREE newsletter and see the details inside)

Lists

Best Selling Magazines in the World

Shortest People in History

The Most Celebrated Holidays in the World

Most Expensive Handbag Brands in the World

Top Selling Comic Book Issues of this Century

The Most Powerful Women in Politics

Best Paid DJs

Most Rebellious Female Artists

Best Paid TV Actresses of 2014

Best Paid Actors of 2014

Most Expensive Horses in the World

Tallest People Ever

Most Encouraging Feminist Celebrities

Best Paid Supermodels of 2014

Top 10 Suburbs for Retirement in 2015

10 Wealthiest Cities in America

Top 10 TED Talks for Entrepreneurs

Best TED Talks on Education

25 Most Dangerous Places to Live in America

Top 10 Ski Resorts in the United States – 2014 List

Top 10 Most Remote Places in the World

Most Visited Museums in the United States

Wealthiest Photographers in the World

Most Famous Gay Athletes

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!