The Five Dumbest Things on Wall Street This Week

1. Aluminum Lightweights

A big shareholder is out to foil Alcoa's (AA) grand plans.

The New York-based aluminum company stunned Wall Street Monday by unveiling a $27 billion unsolicited bid for Canadian rival Alcan (AL). The move sent shares of both companies soaring, as investors bet more buyout bids are on the way.

Alcoa sees an opportunity to create a global aluminum giant. Noting its "proven track record of successfully integrating companies," the company says it looks forward to "creating a 'best in class' management team drawing on the strengths of both companies." The sides talked for two years but couldn't agree to terms, Alcoa says.

"We have not decided on this course of action lightly," Alcoa CEO Alain Belda insists in a letter to Alcan chief Richard Evans. "Given our prior experience, I did not see an option other than to present this combination directly to your shareholders."

Conveniently, another option was quickly outlined by activist hedge fund Jana Partners. The big Alcoa shareholder sent Belda a letter Tuesday excoriating his record and denouncing his plans. Jana said Alcoa should sell itself instead of pursuing what it called a "misguided" and "ill-advised" acquisition.

Jana says Alcoa shares have been flat for most of Belda's term as CEO. The fund says Belda's acquisition record amounts to a "painfully clear" failure, noting that Alcoa is now in the process of selling several businesses it acquired only recently.

But worst of all, the fund says, Alcoa management appears to be pursuing a costly expansion strategy without considering what investors really want.

"We find it appalling that, by your own admission on yesterday's call, the board did not even consider whether more value could be created for shareholders through a break-up of the company before deciding to pursue Alcan," Jana writes.

Sounds like Alcoa has a tin ear.

Dumb-o-Meter score: 93. Jana speculates that Alcoa shares soared this week on hopes of a breakup, "not as the result of any confidence in management's skill as acquirers."