The Five Dumbest Things on Wall Street This Week

A look at the interesting, unusual and occasionally harebrained on Wall Street this week.

1. Flying Blind at Qwest?

In the wake of the Enron mess, there's a growing perception that executives sometimes enjoy preferential treatment at the expense of the rank and file. Denver telco Qwest (Q) is no stranger to that notion, what with CEO Joe Nacchio recently getting a big raise despite the stock's yearlong plunge.

Is there a more compelling illustration of the appearance of executive privilege at Qwest? To answer that, let's look at a story -- denied by the company, but corroborated by several people at or near Qwest -- about what happened last month after the police learned of a possible physical threat to two Qwest buildings in Denver.

On Monday, March 25, according to the Associated Press, the authorities apprehended a commuter airline pilot outside of Denver. Apparently, the pilot had told an acquaintance that he was contemplating suicide. His intended method? Flying into one of the Qwest towers downtown. The telco occupies two buildings prominent on the Denver skyline: a 38-story tower at 555 17th St. and a 52-story building around the corner at 1801 California St.

It turned out that the risk of catastrophe was less immediate than initially feared by police. The pilot was taken into custody at his home, far from any plane or airport. But what happened in the first few minutes after people in the taller of the two towers -- the one at 1801 California -- learned of the possible danger?

According to four different sources having varying degrees of familiarity with the matter, the top few floors of 1801 California -- the floors where the top execs are concentrated -- were evacuated. But below those floors, these people say, it was business as usual: no warning, no evacuation.

Qwest spokesman Tyler Gronbach vehemently denies that the partial evacuation story is true. "We did not evacuate any of our facilities in downtown Denver because we did not view it as a credible threat," he says.

That's not what others say.

Those include three different Denver-area Qwest employees -- one on a lower floor of that building, another in the nearby 17th Street building, and a third employee with friends downtown -- who tell stories of high-level executives excusing themselves from phone calls, of security personnel evacuating people from top floors on the basis of some "bomb threat" or "security breach," of those same employees, on their elevator ride down, running into pals from lower floors who were apparently unaware of any danger. These employees spoke on the condition of anonymity.

In addition, a man who answered the phone at 1801 California's management office -- he identified himself as an employee of the management company but declined to give his name -- said this week that, yes, the uppermost four floors of the building had been evacuated on March 25 at about 4:45 p.m. local time, after a "sketchy report" of the pilot's intentions arrived from the police. "We treated it as a bomb threat," the man said.

Speaking in great detail, the anonymous building worker said that building management, in conjunction with two Qwest security employees whom he couldn't identify, quickly decided to do a partial evacuation. The decision not to evacuate the building completely, he says, was driven by the late hour of the day because many occupants had already left the building. "The big part of the reason was to avoid a mass panic," he said.

Not long thereafter, the man says, the police informed the building's management that the pilot and his plane weren't in the air, as originally believed. The Denver police department, citing security concerns, declined to comment.

According to local press reports, police figured that if someone wanted to fly into a tower, the logical choice was the taller one. Be that as it may, some Qwest employees can't help but see the incident as the latest tin-ear move by a management team that has repeatedly shown itself to have little regard for the little guy.

In a slightly more charitable explanation, one employee wonders whether the decision reflected a decision maker's confidence in the pilot's flying ability.

2. Double the Size of Your Portfolio in 60 Days!

Speaking of little things, we were puzzled last week to discover that watching CNBC wouldn't just make us wealthier, it would also increase the size of our penis.

Yes, in case you didn't notice, that institution of financial journalism started running ads for an herbal supplement called Enzyte, advertised on its Web site as "the effective, reliable way to natural male enhancement" and "good news for any man who ever wanted to enhance his erection size and increase his performance." For the skeptical, the Web site includes the results of an "independent customer study," in which 87% of participants reported an "erectile size" increase averaging 24%.

Of course, having tested competing products here at the research lab (don't worry -- when we get positive results, we'll let you know), we were a mite skeptical ourselves. So we called J. Stephen Jones, M.D., a urologist at the Cleveland Clinic Urological Institute. He notes that Enzyte says it contains yohimbine, a reputed aphrodisiac whose use is only weakly supported, he says, by past research. "Most urologists do not interpret those studies as indicating any effectiveness," he says. "If they did, we probably wouldn't have Viagra."

Ah, Viagra. A prescription drug. Remember, Enzyte isn't a prescription drug, despite the clever logo on the Web and in the CNBC ads. Just like prescription ads, which usually show the product's trade name (e.g., Viagra) in big letters and the scientific-sounding chemical name (e.g., sildenafil citrate) in parentheses underneath, Enzyte's logo includes the parenthetical phrase "suffragium asotas." No, that doesn't tell you about the chemical ingredients of Enzyte. According to Benjamin Shaer, linguistics professor at Brock University in St. Catharines, Ontario, the phrase means something like "assistance to the dissipated."

Anyway, back to the CNBC ads, which featured a guy with a milewide grin frozen on his face, reading an Enzyte brochure, confounding his colleagues with his bliss and returning home at the end of the day to a wife with a similarly ecstatic smile. We were dying to know whether CNBC was so hard up for dot-com ad dollars that it would run ads for penis enlargement supplements.

Well, apparently it isn't. In response to an inquiry made by the Five Dumbest Things Research Lab -- we're deadly serious here -- CNBC has pulled the Enzyte ad. "Thank you for bringing it to our attention," says a CNBC spokesman who begged not to have his name associated with this news item.

Wow. We always knew the research lab was a hard-hitting force in the scientific/financial community. Now you do, too.

3. Tough Spitzer

So we're following the Merrill Lynch (MER) soap opera closely.

On Monday, New York State Attorney General Eliot Spitzer announced that the "supposedly independent and objective investment advice" coming from former Internet analyst Henry Blodget and his team was "tainted and biased" by the desire to help Merrill's investment banking business. Spitzer's "conclusions are just plain wrong," Merrill responded in a statement. "We are outraged that we were not given the opportunity to contest these allegations in court."

So we'll see how that all shakes out. In the meantime, we took a close look at the anti-Merrill court filing Spitzer made Monday. And our conclusion? It would be a lot of fun to be Merrill's lawyer on this one.

Sure, there are a few allegations in there that wouldn't look good for Merrill if they're proved true. On the other hand, there's a lot of filler in there that we at the lab don't believe quite proves the attorney general's contention that Merrill's ratings "did not reflect the analysts' true opinions of the companies."

Like this, for instance: In one example that our editor will let us print, one Merrill analyst apparently referred to Excite@Home as a "piece of crap" in an email, at a time when the firm had an accumulate rating on the stock -- the firm's second-highest rating.

We're supposed to believe that an email fragment like that reflects an analyst's true feelings? Maybe it reflects a bad day, a freewheeling debate, or just trash talk among buddies at the workplace.

Suppose you're in charge of advertising for a potato chip manufacturer. One day, after eating too many of the company-supplied free potato chips on your lunch hour, you're heard muttering, "If I eat another one of these buggers, I'll puke."

So that means when you run an ad calling them the world's best potato chips, Eliot Spitzer will break down your door?

4. Air Quotes at Instinet

Here's a little journalism secret: Sometimes when people are quoted as saying something in a press release, they didn't necessarily really say it.

Yes, it's true. Sometimes, believe it or not, the words in the quotes are just manufactured by a publicist and OK'd by the ostensible speaker.

No!, you're thinking. Can't be.

'Fraid so. Just take a look at this quote from Instinet's (INET) Tuesday announcement that CEO Douglas Atkin was departing the firm.

Says Atkin, "I have enjoyed immensely my time at Instinet, but I want to move on and focus on other interests including my Board position at ClickIQ, Incorporated."

Yeah. It's easy to imagine Atkin spitting that one out in casual conversation.

Let's just hope that's the only suspect quote coming out of Instinet these days.

5. Open mouth. Insert Footstar. Chew.

This week's award for Awkward Business Phraseology goes to Footstar (FTS), operator of the Footaction and Just for Feet retail chains.

In a Tuesday press release, the company proudly reminded Wall Street that it has long been a champion of the little guy. Exhibit A was its shareholder rights plan, designed to prevent abusive takeover tactics. That plan, gushed Footstar, has always had "a shareholder friendly 'chewability'" feature, one designed to ease the way for takeover offers meeting some certain standard of quality.

Chewability? Have we walked into a marketing meeting for Flintstones vitamins?

It turns out, unfortunately, that the "chewable pill" is a common expression in takeoverspeak, one whose usage we can trace back to 1989. It's a cousin of the older expression "poison pill."

But a chewable Footstar? I'd rather take an Enzyte capsule.