George Mannes

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The Five Dumbest Things on Wall Street This Week

George Mannes

1. Speaking of Which, the National Retail Federation Has Launched a Campaign Called 'Got Possessions?'

Apparently, AT&T (T - Cramer's Take - Stockpickr) thinks it's a good idea for people to talk to other people important in their lives.

Hard to believe, huh?

Yes, just in case people have forgotten they're supposed to spend some quality time with the family, Ma Bell said this week that it is launching an advertising campaign titled "Talk Is Good." The ad campaign "invites consumers to keep an open dialogue with the most important people in their lives," reads a statement attributed to Cathy Constable, AT&T Consumer's vice president of marketing services.

We'll skip the part here where we debate the application of this message in the world of geopolitical events. Instead, we'll explore some other subtexts of this particular campaign.

Especially given the other comments in AT&T's announcement of the new advertisements.

"Our findings confirmed that consumers are communicating more than ever before," says Constable. "Of course, along with that increase, consumers are receiving more than their fair share of unwanted messages and clutter."

Making Alexander Graham Bell Smile

Hmm. Could it be that AT&T is dissing the Internet-based communications fad -- you know, email and instant messaging?

"AT&T is and has always been committed to the idea of better communication, as opposed to simply more communication," says Ann Hayden, an executive at Y&R Advertising who worked on the campaign.

Double hmm. Could it be that AT&T is dissing all the people who have signed up for wireless phone service from companies such as Sprint PCS (PCS - Cramer's Take - Stockpickr) -- all-you-can-talk plans that eat into AT&T's long-distance and local wireline revenues?

OK, OK. Maybe AT&T isn't so Dumb for evading the issue here. Maybe "Talk Is Good" is simply a lot less embarrassing than "Please Don't Adopt New Communications Media or You'll Run Us Out of Business."

2. Oh Yeah, That Guy

Speaking of the honored corporate communications technique of misdirection, how about the folks at Charter Communications (CHTR - Cramer's Take - Stockpickr)?

The nowhere-to-go-but-up cable TV operator -- which earlier this year sacked its chief operating officer and chief financial officer in a move related to a grand jury investigation of its accounting practices -- accentuated the positive this week, personnel-wise.

The company, which is going through its second restructuring in a year, announced the appointment of three new executives to the company this week, noting the appointments in three different press releases totaling more than 1,000 words.

"Investor confidence and employee morale will continue to be revitalized as we execute on the organizational restructuring plan we announced last October with high-level appointments like these," said Charter CEO Carl Vogel in one of the press releases.

Buried Treasurer

The company was less forthcoming, however, about one high-level employee departure. To mark the resignation of longtime treasurer Ralph Kelly, the company issued a terse 8-K and left it at that.

Keep in mind that the investigation of Charter's finances is ongoing, though there's no hint that Kelly's been involved in any alleged wrongdoing. And keep in mind that Wall Street has been worrying that Charter's solvency could be further jolted by the possibility it might not be able to file its 2002 financial statements by its March 31 deadline. So the fate of the company treasurer, one might point out, might also have a wee bit of an effect on investor confidence and company morale.

A Charter spokesman says Kelly's departure will have no effect on the company's ability to file its financial reports in a timely manner, nor has the resignation any effect on, or relationship to, any ongoing investigations of the company.

3. Tell Me More, Tell Me More

Verizon (VZ - Cramer's Take - Stockpickr) got all excited this week about expanding the availability of high-speed Internet service. "Millions of people soon will have an additional choice for broadband Internet access when Verizon expands its mass-market broadband capabilities by nearly 30% this year," the company says.

Where have we heard that one before?

Oh, yeah, now we remember. "We're intensifying our commitment to making ... DSL a mass-market service and responding to the thousands of customers who've told us they want DSL as fast as we can get it to them," the company said.

Of course, that was back in 1999, when Verizon was known as Bell Atlantic.

4. All in the Family

It warmed our heart to read the Securities and Exchange Commission complaint filed this week against HealthSouth (HRC - Cramer's Take - Stockpickr) and its longtime chairman, Richard Scrushy.

See, by 1997, says the SEC, certain senior accounting personnel at the medical services company started referring to themselves as "family members," and started gathering together regularly at what they called "family meetings."

Family members at family meetings. How sweet! Don't all corporations aspire to create One Big, Happy Family?

Unfortunately, alleges the SEC, the purpose of these meetings was to manage a long-running scheme to artificially inflate HealthSouth's earnings, a scheme the SEC says began and continued at Scrushy's insistence.

Yes, that's a sweet family business, as long as daddy is named Tony Soprano.

5. What If They Gave a Shareholder Meeting and Nobody Came?

Call us cynics, but we at the Five Dumbest Things Research Lab suspect that companies sometimes don't want shareholders to show up at shareholder meetings.

Yes, while companies are happy to come to New York to meet with professional investors, it seems to us that when annual meeting time rolls around each year, corporate America retreats to less densely populated areas. Could it be that corporate executives, bracing themselves to go face to face with cranky shareholders, seek out locations featuring relatively few cranky individuals within driving distance?

Just a theory. But one we think about this week in the context of Disney's (DIS - Cramer's Take - Stockpickr) annual shareholder meeting, which was held this Wednesday.

Yes, it's been six years since the House of Mouse has held its peripatetic annual meeting in either of the major coastal investment and population centers of New York or Los Angeles. Sure, the company hasn't gone completely AWOL -- the 2000 meeting, for example, was in Chicago -- but generally speaking, as the stock has slid, so has the population of the cities Disney has been camping out in. In 2001 the meeting was in the Dallas/Fort Worth metroplex, in 2002 it was in Hartford, Conn., and this past week it was in Denver (which clearly represents a step up from Hartford while being smaller than Dallas).

Even the most agoraphobic Disney executive, however, likely thought things went too far with Wednesday's meeting. Because of a snowstorm in Denver, hardly anyone showed up to hear the company lower financial forecasts for the year. The Rocky Mountain News, in fact, counted only 42 shareholders in attendance. About the only thing useful that came out of the meeting, it appears, was the News' headline: "Snow white dwarfs turnout for Disney."