The Five Dumbest Things on Wall Street This Week

3. Expedient Expedia

Expedia's (EXPE Quote) huge buyback plan didn't travel well.

The Bellevue, Wash., online travel agency opened the week by dropping its $3.5 billion leveraged stock repurchase. Monday's move came just a month after the company unveiled the self-tender plan to great fanfare.

"With this action," Chairman Barry Diller said June 19, "we couldn't be clearer that the management and the board of this company are confident in the value of Expedia and in its long term future."

Bond investors appear less confident in Expedia's future, however. They demanded interest rates that would have made it prohibitively expensive for Expedia to borrow enough money to buy back some 40% of its stock, as the plan envisioned.

So this week the company rolled out a smaller buyback -- covering 25 million shares, rather than 116 million as originally planned. The decision will save Expedia millions of dollars in financing costs.

But the flip-flop also saddled shareholders with a $1 billion plunge in market value, as Expedia shares sank 12% over two days.

"While we remain confident in Expedia's long-term prospects and will continue to be net buyers of our shares, the terms available to us in the current debt market environment were simply unacceptable," Diller explained. But, he was quick to add, "Our confidence in Expedia's future is well held."

It's certainly not widely held.

Dumb-o-Meter score: 85. The leveraged buyback would have boosted Diller's stake in the company above 50%.