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The 5 Dumbest Things on Wall Street: March 18

5. Pepsi Fizzles Out

Who needs to waste all that money advertising in the Super Bowl? Well, looks like Pepsi should have.

On Thursday, Beverage Digest released annual market share data that showed that Pepsi (PEP - Get Report) is no longer playing second fiddle to Coke (KO - Get Report). Now it's third fiddle, behind Coke and Diet Coke. There was a time that Pepsi sought to seriously challenge Coke. Now, it seems the company is taking the fizz out of its own sales through its own brand of savvy marketing.

Pepsi has been losing ground to Coke for some time, but it seems to have helped the process along in 2010 by turning its back on advertising in the 2010 Super Bowl in favor of a $20 million charity competition, the Refresh Project. According to Advertising Age, it was the first time in 23 years that Pepsi decided the Super Bowl just wasn't for them.

The Refresh Project has gotten some great attention, like a New York Times article profiling how a shadowy figure from India known only as "Mr. Magic" was employed to stuff the ballot box in order to help charities win the Pepsi grants.

Credit Suisse analyst Carlos Laboy said in a research note that he was "worried about the morale implications for PepsiCo's beverage people of having the company's namesake brand and its top beverage brand dropped to a tertiary spot within its category at a time that a tangible sign of brand momentum for the core brands would help." That lack of momentum, said Laboy, has nothing to do with larger trends in the soft drink market, and everything to do with Pepsi. "There is no U.S. beverage category problem, just a Pepsi problem," he wrote.

Pepsi, of course, isn't worried. "I don't think that we'd view this as a blow," a Pepsi spokesperson told Ad Age. "We're looking at our total position. Consumers want a wide range of products for a wide range of occasions. And we're in a great position to satisfy them with that. Today we're fighting a totally different battle on a much bigger battlefield than just colas, though we are completely committed to carbonated soft drinks."

This may be just us, but if the battlefield is getting bigger, we'd rather have our biggest and most experienced unit leading the troops forward, not backward.

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