The Five Dumbest Things on Wall Street This Week: July 3
Buy You a Beer
The brass at Anheuser-Busch (BUD) appear to be guzzling a bit too much of their own suds lately.
How else could you explain management's decision to nix a nonbinding $65-a-share ($46.3 billion) bid from Europe's InBev and then roll out a cost savings plan that does nothing but fleece its own employees?
Well, that's exactly what the Bud bosses are up to. First, InBev's bid gets the thumbs-down last week, and then on Friday, Bud announces that it will cut $1 billion in costs, in part by paring its employee benefits for those lucky enough to remain employed at the iconic brewer.According to an internal memo, Bud "plans to reduce lump-sum pension payouts to staff and raise employee health care contributions as part of a strategic plan," a report by Reuters states. In addition, around 1,300 salaried positions look likely to get the chop as well. This latest hacking comes in response to InBev's interest in Bud's shares. It's nice that someone is looking out for Bud's shareholders because the company's execs don't seem to have been making that much of a priority. For roughly six years, BUD stock has languished. Shares were trading at just under $54 in late April 2002, and through mid-December 2007 never breached the $55 level. That is until recently, when InBev stepped in with $65-a-share offer; the stock now trades around $61 a share. InBev's offer may have delivered some return to shareholders, but Bud's employees appear to be stuck picking up the tab, at least in terms of the company's announced cuts. That's especially troubling, because Bud's employees are rallying around the brewmaster. The Save BudweiserWeb site announces "Let's Save More than Just our Beer," and, according to The Economist, so far the site has collected 70,000 electronic signatures. Bud's execs may be enjoying the brew, but for the company's employees, happy hour is over. Dumb-o-meter score: 95. Time to start crying into your beer.
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