This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The 5 Dumbest Things on Wall Street This Week: May 3

5. CME Czechs Out

Central European Media Enterprises (CETV - Get Report) apparently has a new motto: If at first you don't succeed in selling advertising, try, try to raise prices again.

Yeah, we don't get it either. Then again, we don't speak Czech very well.

The loss-making broadcaster, most often referred to as CME, kicked-off its debt-reduction plan by selling around $174 million worth of stock Monday. CME's partner Time Warner (TWX) was the biggest buyer, sucking up 49.9% of the class A stock to maintain its stake at that level. Time Warner's purchase comes on top of an additional $200 million of CME class B preferred shares it will buy in a private placement. CME said it would use $300 million of the net proceeds from the sale to retire a slice of pricey 11.63% senior notes due in 2016.

Although the fundraising maneuver was widely expected, shares of the company still sank over 10% to $3.90 on the extra shares being puked onto the market. Also not helping the stock was CME's dismal first quarter results. CME reported a $109 million Q1 loss Monday, compared with $13.8 million a year earlier. Net revenues sank a sickly 18.2% to $137 million, mostly due to Czech advertisers protesting higher rates.

"Our pricing actions in the Czech Republic and across our region will continue as we are determined to reverse the trend of declining TV advertising spending," said CME CEO Adrian Sarbu.

Yo, Adrian, what are you punch-drunk? If the customers in your largest market weren't buying from you before, do you really think jacking up your rates will help your cause? Do the words "price elasticity of demand" translate into Czech, or did they get lost with Slovakia?

At least Time Warner is lowering its cost basis as it vacuums up another round of CME's sloppy stock. A year ago the media giant bought 9.5 million shares of CME for $7.51 apiece in the company's last deleveraging exercise. Time Warner is down nearly 70% on its original 31% stake purchased in March 2009.

Yeah, we don't get why Time Warner would throw good money after bad either.

Then again, we don't want to speak too soon.

Jeff Bewkes' investment in CME has been one of his rare missteps since taking the CEO job at the media giant in 2008, so maybe we better Czech back later.
1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
CETV $2.66 0.00%
HEB $0.14 0.00%
HLF $57.95 0.00%
FB $117.58 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs