The Governator is terminating his support for offshore drilling. And he's not being too slick about it.
In the wake of the massive oil spill in the Gulf of Mexico, California Gov. Arnold Schwarzenegger announced he will withdraw his support for a plan to expand oil drilling off the Golden State's coast. Schwarzenegger intended to use funds raised by selling offshore drilling rights to help close the state's $20 billion budget deficit.
"You turn on the television and see this enormous disaster, you say to yourself, 'Why would we want to take on that kind of risk?' " said Schwarzenegger at a news conference.
Funny, we ask ourselves the same thing about Arnold every time we see
But seriously folks, it's not like we have a problem with Arnold changing his mind. Even
Conan the Barbarian
would weep like a
after seeing images of the Gulf Coast's wildlife covered in oil and muck. Moreover, watching thousands of brave workers fight to contain the damage from the
-owned rig reminds us all that the country's real heroes are not necessarily found on the silver screen holding bazookas.
No, what's unsettling to us about Arnold's startling about-face is that he needed a picture to tell him the story, even though the story is all too familiar.
Come on, Arnold. You don't need
to remember the
Dumb-o-meter score: 75 -- "California is going to have to drill somewhere else to for a budget solution."
Here's a story about the dumb, the bad and the "ugly girl."
CEO Jeffery Smisek stuck his foot firmly in his mouth Monday when he was describing his initial reaction to the news released earlier this month that
( UAUA) was in merger discussions with
Referring to United Airlines CEO Glenn Tilton, he said, "I didn't want him to marry the ugly girl; I wanted him to marry the pretty one, and I'm much prettier." United Airlines parent UAL announced Monday it will buy Continental for $3.17 billion in an all-stock deal that will form the world's largest carrier.
Snap! Take that, US Airways CEO Doug Parker. In your hideous, revolting, unattractive, unsightly, repellent face!
OK. Maybe that's a bit much, but like Smisek we "got carried away in the moment," which is what Smisek wrote in a letter to Parker after he realized the stupidity of his comments.
As for Parker, he accepted the Continental CEO's apology and shot back in a letter to employees that US Airways has been looking better than Continental of late. Its first-quarter loss shrank faster, and its profit margin was higher than Continental's. Most importantly, Parker highlighted the fact that US Airway's stock price is up more than double Continental's, even after the merger announcement.
Thankfully, Parker didn't tell his employees they had
a really good personality
Dumb-o-meter score: 85 -- Talk about a joke that crashed and burned.
When the folks at
wrote "Liftoff at J&J" last weekend, they were not talking about lifting
Johnson & Johnson
products off drugstore shelves due to a massive recall.
At least we think they weren't.
The U.S. Food and Drug Administration on Saturday urged consumers to stop using liquid Tylenol, Motrin, Benadryl and Zyrtec medicines for children and infants after J&J's consumer division announced a broad recall of the products. While not life threatening, the FDA found that ingredients used in some of the 40 varieties of children's cold medicines were contaminated with bacteria.
Ironically, the recall was announced just as J&J was being featured in the
cover story, which proclaimed that the drug and consumer product giant's "earnings will get a lift in coming years from an improving economy, a promising product pipeline and a solid balance sheet."
"Shareholders, prepare for liftoff," said the
Consumers, prepare to switch to another brand, we say.
Dumb-o-meter score: 85 -- Forget the curse of the Sports Illustrated cover. It's the Barron's cover that will really bite you in the wallet.
Dollar Gets Thrifty
Dollar Thrifty Automotive
( DTG) may have been too thrifty for its own good when it agreed to sell itself to rental car giant
CEO Ronald Nelson announced he plans to trump Hertz's $1.17 bid, or $41 per share, saying Dollar Thrifty agreed to sell itself too cheaply last week.
Nelson claimed he was surprised to see Dollar Thrifty jump so quickly at Hertz's offer considering Avis executives have been trying to woo Dollar Thrifty's brass for "several months." Nelson said his staff even had a dinner planned for last week that was canceled after the deal with Hertz was announced.
In what could be the lamest corporate love letter ever, Nelson spilled his guts to Dollar Thrifty's execs (
Dumbest translations in italics
"It is hard to understand how your failure to engage in discussions with an interested strategic buyer (
How come you never called us?
), who you know also would be able to achieve significant synergies as a result of a combination (
We could be so good together!
), can be consistent with the fiduciary duties that you and your board carry to seek the best possible deal for your shareholders (
Your parents, let alone regulators, will never allow it.
Dollar Thrifty, which now trades above $50 per share, responded coolly to Nelson's pining on Wednesday saying "the board is prepared to entertain a substantially higher offer." If Dollar Thrifty reneges on the deal, however, it would be forced to pay a hefty $40 million breakup fee.
All this in-fighting just goes to show what happens when you marry for money, or more appropriately, not enough of it.
Dumb-o-meter score: 80 -- Love Hertz. Ain't that the truth.
InterMune Loses Immunity
The money lost by
shareholders is no joke. Nevertheless, we can still chuckle at the slew of analyst downgrades following the stock's implosion.
Shares of InterMune lost more than three quarters of their value on Wednesday
Esbriet, also called pirfenidone. InterMune said the Food and Drug Administration asked for an additional study on human patients, which could potentially delay its approval by years.
If only investors had sold the shares on Monday when the stock reached a 52-week high of $49.46 a share they would have avoided the trampling. If only they had some guidance from, say, a Wall Street investment bank with mathematically modeled price targets for the stock.
Like the research team at
, for example, who downgraded the stock to perform from outperform on the bad news, replacing their $50 price target with a "fundamental value range" of $12 to $14. Or the folks at
, who lowered their price range from the low $40s to around 10 bucks a share. Not to forget the very aggressive folks at
who lowered their target to $10 from $66.
Thanks guys. What would we do without you, other than save a boatload of money?
Dumb-o-meter score: 95 -- Not every analyst forgot to factor an FDA rejection into their spreadsheets. Kudos to Jefferies analyst Eun Yang for correctly making the call."
Before joining TheStreet.com, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.