The Five Dumbest Things on Wall Street This Week - TheStreet

1. Brobeck, Can You Spare a Dime?

Sometimes a company's timing is better thanperfect.

The latest proof of that particular theory arrivedin our mailbox recently, in the form of a postcardaddressed to the research lab's human resourcesdirector.

(Actually, he's known as our chief people officer,but

that's anotherstory.)

Sent by the legendary Silicon Valley law firmBrobeck, Phleger & Harrison, the mailing trumpeted theonline availability of the firm's monthly newsletter

Labor and Employment Update

.

"Labor and Employment Issue Alert," read the postcard. "Find out how recent court decisions will impactyour company in 2003."

Sounded promising. That is, until we visitedBrobeck's Web site, where we encountered the followingnotice: "Brobeck is winding down its operations as alaw firm. We expect that process to be substantiallycompleted by the end of February."

In other words, recent court decisions will haveprecious little impact on Brobeck in 2003. They've gotother labor and employment issues to worry about.

2. PowerBook to the People, No Delay!

For those of you who are interested in effectiveadvertising strategies, we'll let you in on a littlesecret: If you want people to buy a Volkswagen, don'thave the star of your commercial driving a Saab.

"Well, duh!" you must be thinking. "That'sobvious."

Gateway to a PowerBook?

Maybe to you.

Unfortunately, it wasn't to someone at

Gateway

.

As the Five Dumbest Things Research Lab belatedlylearned this week, a Gateway ad published lastDecember featured a prominent picture of a fun-lovin',presumably music-downloadin' member of the youthculture groovin' with his PowerBook. Manufactured andmarketed, of course, by

Apple

(AAPL) - Get Report

.

This reproduction of the ad has been circulatingfor a while, apparently. We found it on theApple-centric site Spymac.com.

A Gateway spokesman acknowledges the goof, whichshe says ran only once, in

PC Magazine

, beforeit was caught. She attributes Apple's guest-starringrole to injudicious use of a stock photo found in alibrary of ready-to-use photography. (For anotherexample of stock-photo weirdness,

lookhere.)

3. I Think That I Shall Never See a Poem as Lovelyas Altria

Speaking of advertising that makes you think, haveyou ever seen so much moisture in one ad as you do inthe new commercial for Altria (MO) - Get Report?

Yes, Altria. The company formerly known as PhilipMorris.


We're talking water dripping off of rain-soakedbranches. Splashing in a pond. Babbling in a brook.Roaring down a waterfall. And curling into a mightyocean wave.

Man, this stuff makes Royal CaribbeanCruises ads look like they wereshot in the Sahara.

The hilarious thing about all this water is whereAltria, nee Philip Morris, makes most of itsmoney: tobacco.

Yes, in 2001, 61% of Altria's operating companies'income was derived from tobacco, down from 66.3% in 1999.For the first nine months of 2002, it was 62.8%.

Yes, tobacco. As in dried leaves. As in driedleaves set on fire. As in smoldering leaves inhaled asa lungful of smoke.

This is exactly the stuff, of course, that makesus think of thirst-quenching, drizzling, extra-moistwater.

But hey. If we had any imagination, we wouldn't beworking in a research lab.

4. Too Clever by Half

We don't know about you, but when there's bad news on the way, we at the Lab just want to hear the whole story, plain and simple.

It seems Wall Street is the same way. Witness last week's action in

Universal Health Services

(UHS) - Get Report

, a King of Prussia, Pa., hospital operator. Judging by the market's reaction, it seems the company could stand to brush up a bit on its bedside manner.

A week ago late Thursday night, Universal Health said its financial chief would be leaving.

Fairly or not, some investors almost always see a CFO's departure as a red flag, regardless of the circumstances. But what was most striking about Kirk Gorman's departure was the company's explanation. The change, Universal said, came after a

"philosophical debate" between Gorman and Universal's auditors, KPMG. The company declined to offer specifics, other than to say twice at some length that everyone's integrity remained intact.

This muddle left analysts on a Friday conference call scratching their heads. "I'm old enough to know bull ... when I hear it," one analyst said on the conference call. "You're asking us to believe a totally bizarre explanation. ... You're confusing the whole world, and the stock's getting killed!"

At least one analyst surmised that Universal had been constrained by legal questions in what it could say about the situation. That didn't keep her from downgrading the stock and cutting her price target nearly in half, though. And for its part, Universal seemed to think its former top financial exec was just too smart for his own good.

"The problem relates to Kirk's analytical abilities, which are ... much above average," Universal CEO Alan Miller said on a conference call Friday morning. "It made

KPMG uncomfortable."

It made investors uncomfortable too, apparently. The stock dropped $10 to $32.

5. Fresh Squeeze

Of course, Universal Health is far from the only outfit winning friends with its conference call banter. As our colleague Herb Greenberg of our sister site

Street Insight

pointed out last week, listeners to a recent

Fresh Del Monte

(FDP) - Get Report

call were treated to a bizarre confrontation: An executive refusing to field a question from an analyst.

During the Feb. 11 call, analyst Heather Jones of BB&T Capital Markets, who has a sellrating on the stock, started asking questions. After she finished, CEO Mohammad Abu-Ghazalehtold her, "Let me tell you, Heather, one thing, please. You are covering us without our will, and we would not like you to ask questions on this conference call."

Jones began replying but was cut short by Abu-Ghazaleh, who added, "We don't want you to askquestions. You can make your own conclusions. You can cover us the way you want. But you have not been covering us in any objective way, and we thank you for being on this call. But we don't like to answer your questions."

Of course, there's no surprise in promotional-minded execs shunning critical analysts. Indeed, as a

previous installment of this column explored, big companies have been known to employ any number of techniques to dodge questioners who might be expected to skip the obligatory "Great quarter, guys." Reg FD or not, there's plenty of leeway in who gets to say what on those calls.

As for Jones, she seems to be handling the snub well enough. The analyst told

Dow Jones

, "First I was enraged. Then I was happy. It confirms our caution on the company."