Last Month’s 5 Dumbest Moves: Carnival Corporation (CCL), J.C. Penney Company Inc. (JCP)

I write a weekly column every Friday detailing five dumb financial events that took place earlier in the week.

February was particularly rich in fiscal buffoonery so I figured I would revisit and update some of those entries in going over five stupid things that happened.J.C. Penney Company Inc. (JCP)

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. Cruising like Augustus Gloop
Carnival Corporation (NYSE:CCL)
has another maritime disaster on its hands.

The idling of the Carnival Triumph this month — which clearly is not on the scale of the liner’s deadly Costa Concordia mishap last year — has set both Carnival Corporation (NYSE:CCL) and the cruise industry back.

Engine fires will happen, but taking five days to tow the idled ship ashore as stories surfaced of overflowing sewage, a scarcity of power and plumbing, and long lines for food is going to make it hard for the cruising industry to command the kind of rates on future sailings that it was collecting before the ironically christened Triumph‘s failure.

Why did it take this long? Why were passengers subjected to such deplorable conditions? Expect lawsuits to keep this in the news, tarnishing Carnival Corporation (NYSE:CCL)’s brand along the way. Like Triumph toilets, you just can’t flush this sewage away so easily.

2. Range Anxiety: The Musical
Things got testy between Tesla Motors (NASDAQ:TSLA)‘ Elon Musk and a reviewer whopanned a test drive of the Model S sedan.

The New York Times‘ John Broder offered a pretty scathing critique on an extended test drive that culminated in a tow after the vehicle stalled between recharging stations.

Musk was quick to defend his all-electric car. A check of his logs showed that Broder didn’t wait for the charging process to complete at most of his checkpoints, drove over the speed limit in some cases, and took some extended detours.

Apart from the creepiness of Tesla monitoring every action a reviewer makes — something that Tesla emphasized it doesn’t do with its actual customers — Musk’s original defense paints the car in an unflattering light.

  • You’re not supposed to drive a Tesla fast?
  • You pay nearly $80,000 for the high-end model yet you still have to wait a long time at recharging stations?
  • Isn’t driving a fun car supposed to be about the detours?

Musk was right to defend his car against the claims, and it helped Tesla’s cause that others duplicated Broder’s exact trip without any hiccups. However, sound arguments fall apart when they’re not particularly flattering for the premium luxury car.

3. These guys could use an “easy” button
No one will argue against the combination of OfficeMax and Office Depot (NYSE:ODP) . The two office supplies retailers are struggling to grow, and there will be some real synergies realized as the two chains hook up.

However, Office Depot leaked the news prematurely.

News of the merger was buried in the company’s earnings release, at least two hours before the news was supposed to go out. Office Depot had to retract the release and OfficeMax and Office Depot scrambled to crank out a joint announcement more than two hours later.

This apparently wasn’t Office Depot’s fault. Thomson Reuters took the blame for the premature press release. The merger was rumored to be in the works for days ahead of the early wedding announcement, but it was still a boneheaded move.

4. Penney for your thoughts
J.C. Penney Company, Inc. (NYSE:JCP)
continues to be a disaster.

The rudderless retailer posted an embarrassing 31.7% slide in comps during the holiday quarter ending in January.

Earnings report was dreadful, and the trend has been disheartening. Same-store sales fell a sharp 18.9% during the quarter ending in April after the company initiated CEO Ron Johnson’s new “fair and square” model. Comps then went on to slip 21.7% in the quarter ending in July, and by 26% in the October quarter.

Johnson was wrong. His dream of replacing sales and coupons with everyday low pricing has been a disaster. It frightened off loyal shoppers, and it wasn’t enough to woo adequate replacements.

The good news, one can argue, is that now the disappointing department store operator will come up against these steep declines.

It can’t get much worse. Right?

However, it did get that far — and how Johnson is still around after taking a bad hand but playing it horribly is beyond reason.

5. Social disorder
It wasn’t a banner month for Facebook (NASDAQ:FB) , and not just because it’s trading 13% lower in February after rallying in prior months.

There are two mishaps worth highlighting here.

The first came on Feb. 7, when — for a few harrowing minutes — websites with Facebook Connect buttons found visitors redirected to a Facebook error page. They couldn’t access the websites that they wanted to visit.

The problem was quickly rectified, but not before countless users felt they had come across a virus that was hijacking visits to their favorite websites. The event will likely lead many to wonder if Facebook has too much power if its app can take visitors on this kind of joyride.

The other issue involves how Facebook communicated a potential video advertising product.

Facebook’s VP of marketing was asked during The Future of Media conference if the social networking giant would consider running auto-play video ads. These are the multimedia spots that kick in the moment that someone visits a website.

“I believe there are ways we could do it,” he responded, assuming that the ads would not be destructive to the user experience.

Wrong answer. Any auto-play ad — by definition — is destructive to the user experience.

The article This Month’s 5 Dumbest Moves originally appeared on Fool.com.

Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Facebook and Tesla Motors. The Motley Fool owns shares of Facebook and Tesla Motors.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

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 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!