The Five Dumbest Things on Wall Street This Week

Updated from 7 a.m.

1. Love Is Blind

Bausch & Lomb (BOL Quote) is getting another look on Wall Street.

Buyout firm Warburg Pincus agreed to pay $3.7 billion in cash for the struggling Rochester, N.Y., eyecare company. Shares jumped 8% Wednesday on news of the acquisition, which will give Bausch's long-suffering investors $65 a share -- a price they haven't seen in more than a year. Bausch can spend the next month and a half soliciting better offers, too.

"As a private company," Bausch & Lomb CEO Ronald Zarrella said, "Bausch & Lomb will have greater flexibility to focus on our long-term strategic direction."

That's swell, because focus clearly has been lacking for some time. The company said last week that it would be late in filing its first-quarter financials because of "the significant time and effort involved in completing" last year's annual report. For that matter, Bausch still hasn't filed its quarterly reports for the first three quarters of 2006 and the last quarter of 2005.

Meanwhile, the company continues to reel from last year's recall of one of its best-selling contact lens solutions. Bausch reluctantly withdrew ReNu with MoistureLoc last May after tests tied the product to a disease known as Fusarium keratitis, which can lead to blindness.

Even as government data showed most patients in last year's keratitis outbreak had used MoistureLoc, the company spent weeks trying to shift the blame elsewhere. Loath to concede a possible product flaw, Bausch & Lomb offered helpful hints such as "never put contact lenses in the mouth."

Now, though, Warburg is so smitten that it's willing to see Bausch in a better light.

"Bausch & Lomb is an exceptional company," Warburg managing director Elizabeth H. Weatherman said, "with significant potential and a strong commitment to its employees, partners and customers worldwide."

Even private equity has its blind spots.

Dumb-o-Meter score: 93. In recently filing its 2005 annual report, Bausch complains of its need "to analyze amounts associated with the highly technical and complex area of accounting for taxes in a number of jurisdictions around the world."