The Five Dumbest Things on Wall Street This Week: May 4

3. Einhorn's Interrogation

Somebody get hedge fund honcho David Einhorn a trench coat and a glass eye, because he really is turning into Wall Street's version of Lieutenant Columbo.

The founder of Greenlight Capital, whose decision to short Green Mountain Coffee (GMCR) is looking awfully prescient right now, personally sent shares of Herbalife (HLF) spiraling down 21% Tuesday, after he publicly questioned how the weight loss company quantifies its distributors and consumers during its post-earnings conference call.

Late Monday, Herbalife said its first-quarter profit jumped 23%, beating Wall Street expectations, yet it projected a second-quarter profit below the current average analysts' estimate.

Prior to Einhorn piping up on the call, the company's stock was perched solidly above $67 a share, up 29% since the start of the year. After Einhorn started interrogating Herbalife's brass, however, the bottom fell out.

We're not kidding. It was like a Columbo episode after Peter Falk said "Just one more thing." The perp, or in this case, the stock, just cracked.

And to be honest, Herbalife CFO John Desimone's answers may have been entirely adequate. The company claimed Einhorn's queries were "elementary" and "usually asked by investors new to our industry" in a statement after the call. Unfortunately, that was not enough to overcome the investor fear associated with Einhorn sniffing around the company and the stock tumbled.

Look, we are not experts on Herbalife's business, and we don't claim to be. We also don't know Einhorn's motives for his latest gumshoe routine. He could have been short the stock or he could have been searching for a new weight loss plan ahead of swimsuit season. We simply don't know.

That said, for all the dumbness that occurs daily on Wall Street, and all the analysts too lazy to dig for clues, it's nice to see that the market still respects a little detective work.

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