Publish date:

The Five Dumbest Things on Wall Street This Week

Bristol-Myers hopes against hope; <I>The Dead Pool</I> comes to life; obits made easy; revenue by any other name; and sing along with Enron.

1. Situation Hopeless at Bristol-Myers

We at the Five Dumbest Things Research Lab think cancer is Bad. We think Lance Armstrong is Good. We think the champion cyclist's survival of testicular cancer is Good, too.

We also think it's Good for

Bristol-Myers Squibb

(BMY) - Get Report

to sell cancer-fighting medicines used by Lance Armstrong and others.

Despite all that, we at the Lab are astounded by the utter stupidity of an advertisement that Bristol-Myers ran this week following Armstrong's fifth-straight Tour de France victory.

We're talking about a full-page, full-color ad the pharmaceutical company took out Tuesday in

The Wall Street Journal

. The ad congratulates Armstrong, mentions Bristol-Myers' role in his recovery and promotes the Bristol-Myers Squibb

Tour of Hope. That's a forthcoming Los Angeles-to-Washington, D.C., bike trip intended to "create cancer awareness and support ... for cancer patients and their families."

All well and good, except for one little thing: the "Tour of Hope" logo in the bottom left-hand corner of the ad.


Like other versions of the Tour of Hope logotype, the newspaper variation features a picture of the sun in place of the "o" in "Hope." Nothing wrong with that.

No, the problem is that this time around, someone decided to superimpose over that sun a silhouette of a cyclist with upraised arms.

Perfectly appropriate, given Armstrong's recent victory. But it's problematic, too.

See, the cyclist -- like the nearby "H," "P" and "E" -- is rendered in dark blue, a coloration that overpowers the pale yellow sun.


And in both popular culture and artistic typography, a human figure with upraised arms is commonly interpreted as the letter "Y." (Think of the last time you saw someone dancing to the Village People song "YMCA," or just take a look at the logos at right.)

The upshot is that when we first saw the ad yesterday, we thought Bristol-Myers was advertising not the Tour of Hope, but the Tour of Hype.

We weren't the only ones. We sent a copy of the logotype to Grant Hutchinson, a Calgary-based Web designer and typographer. He reports he started laughing the moment he saw the logo.

"I can see what they're trying to do," he says. "They're obviously trying to portray success and hopefulness, but they've sort of missed the boat on the execution of it."

Continues Hutchinson, "All I see is the word 'hype.' Some people won't see it. A lot of people will. Once you see that kind of image, you can't get it out of your head."

Gosh. If there's anything Bristol-Myers and other pharma companies don't need, it's this close identification with hype. One of the common criticisms of the pharma industry is that companies such as Bristol-Myers inflate the demand for drugs by targeting consumers with pitches directing them to Ask Your Doctor About This Drug We Sell.

Yes, we understand that Bristol-Myers may have a moral obligation to let people know about drugs that could save or improve their lives. But one man's informational advertising is another man's shameless hyping. (A Bristol-Myers spokeswoman declined to talk about the logo.)

Moreover, fund-raising events on bicycles have credibility problems, too. Yes, 100% of the $1.5 million or more raised by the Tour of Hope will go to the Lance Armstrong Foundation to fund cancer research. But only last year, a firm that was the biggest organizer of charity bike-a-thons and walk-a-thons ceased operations amid criticism that too little of the money it raised actually went to charities.

Like it or not, hype is looming issue in both pharma advertising and bicycle-based fundraising. And this week, Bristol-Myers inadvertently made it loom even higher.


2. More Anguish From the Middle Eastwood

Message to retired admiral John Poindexter: Haven't you ever seen any Clint Eastwood movies?

As you may have heard Thursday, news reports indicate that Poindexter, head of the Pentagon's Terrorism Information Awareness Office, will soon be resigning to spend more time with his family. The leakage follows the disclosure this week of a Poindexter-associated venture -- hastily scrubbed by the disinfecting power of publicity -- in which traders in a futures market would bet on the likelihood of future terrorist events -- stuff like military coups, hijackings and political assassinations.

Yes, we at the lab are aware that the proposed Policy Analysis Market is arguably a cool, out-of-the-box idea, one that has proven to be an effective predictive tool in less-lethal arenas.

But once you set up a situation in which a person could make scads of dough by correctly predicting a world leader's death by a particular day, you run into a problem: The person who made that bet might come up with some out-of-the-box ideas for improving his odds of success.

We at the lab have been aware of that possibility for 15 years now, ever since Eastwood starred in 1988's

The Dead Pool

, the fifth and final movie featuring the fictional detective "Dirty Harry" Callahan.

Dead Pool's

plot revolves around a mean-spirited but theoretically harmless game in which participants make bets on which public figures they believe will be the first to die. Unfortunately, the villain in the flick is too impatient to wait around for natural causes.

Well, look on the bright side, Admiral Poindexter. In a few weeks, you'll have plenty of time on your hands to watch this and other Dirty Harry movies. We certainly hope it makes your day!

3. Thanks for the Conveniently Spaced Memories

Speaking of famous dead people, the research lab can't help noticing how inconvenient and ill-timed celebrities' deaths can be, especially for major media companies.

But we at the lab believe we've come up with a workable solution, one that combines reverence for the dead with revenue for the living -- namely, the video retailers, cable TV programmers and magazine publishers who enjoy a surge of business after well-known folks die.

Here's how it works, in case you haven't figured it out already.

First, you have to have a dead celebrity -- say, Katharine Hepburn, who passed away June 29. Then you take a few seconds of movie clips on the evening news and a front-page obituary in the next morning's newspaper. Next, you find yourself buying a copy of

AOL Time Warner's

(AOL)

People

magazine so you can read the multipage illustrated recap of said dead star's life and career.

Not long afterward, you head over to a video store such as

Blockbuster

(BBI) - Get Report

, where you find yourself renting one of the star's classics you've never gotten around to watching. And if you never get around to the video store, don't worry: AOL Time Warner's Turner Classic Movies or

Cablevision's

(CVC)

AMC will do a miniretrospective.

Don't forget all the biographies that can be published or rereleased. A. Scott Berg's

Kate Remembered

-- a book that sat around a few years so it could be published days after Hepburn died -- is now No. 16 on

Amazon.com's

TST Recommends

(AMZN) - Get Report

bestseller list.

No doubt about it: Celebrity death is a real revenue-generating catalyst.

Alas, there's a problem. Unlike books, TV shows and movies, which can be released on a carefully planned schedule, celebrities too often fail to die in an orderly fashion. Thus, many famous dead people don't get the multimedia mourning experience that they -- and relevant copyright holders -- deserve.

Just a week ago, for example, film director John Schlesinger died. That would have been as good an excuse as any to launch a retrospective of his important works, among them

Midnight Cowboy

(1969), winner of a Best Picture Oscar,

Marathon Man

,

Billy Liar

and -- oh, what the heck --

Honky Tonk Freeway

.

Unfortunately for Schlesinger's legacy, he soon was succeeded in death by someone with a lot greater marquee value: comedian Bob Hope, who died Sunday. Forget about the special viewing of

Midnight Cowboy

: you're going to watch Hope's

The Paleface

instead.

Yes, in our mind it was just plain unfair of Hope to die so soon after Schlesinger. And so arbitrary. After all, people have been expecting Hope to die for quite some time now. The indefatigable ham made his last public appearance more than two years ago, reports Cleveland's

Plain Dealer

. Tabloids were reporting as early as 2000 that he was near death. Heck,

The New York Times'

obituary of Hope was written by Vincent Canby, the esteemed film critic who himself has been dead for nearly three years. Canby "wrote the piece a few years ago," interim executive editor Joe Lelyveld told the

New York Post

, "and not much has happened in Bob Hope's life since."

So why be forced to run Hope's obit this particular week? Why couldn't we have run it a few months ago, when there were fewer dead celebs in the pipeline?

Yes, instead of waiting for these people to die, let's run their obits on a more convenient schedule. All we have to do is maintain a group of near-dead celebrities whom we can declare Effectively Dead when it's most convenient -- ideally, Sunday evenings on slow-news weekends when no other famous folks have actually died.

Already we can picture the relevant 11 p.m. newscast: "And now some sad news to report: Joe MovieStar was declared Effectively Dead today after a long seclusion. NewsChannel Seven's entertainment reporter Jeannie Happy has the tributes -- plus highlights of his illustrious career. Jeannie?"

By the next morning, People has its Remembering Joe MovieStar Special Collector's Edition at every checkout counter in America. That Friday, TCM launches its already-assembled, ready-to-promote, Pizza Hut-sponsored marathon of Joe MovieStar movies. The media-entertainment complex will be operating at peak capacity.

And how will the celebrities themselves feel about their Effective Deaths? Well, some of them, we dare suggest, won't even be aware of their Effective Demise. Others, like Tom Sawyer and Huck Finn, might actually enjoy the privilege of attending their own Effective Funeral.

Of course, we'd need some safeguards to ensure that Effectively Dead folks don't try to use the publicity generated by their Effective Deaths to launch a career revival.

That would be in bad taste.

4. Operating Prophets

Oops! We almost forgot about the contest!

Last week, we asked readers if they could come up with a substitute for Operating Income Before Depreciation and Amortization, abbreviated as OIBDA, pronounced as "Oyb-dah."

Though more and more companies are using OIBDA as an important financial number

(see last week's Dumb Things to learn why), nobody seems particularly happy about it.

So what measures, abbreviations and pronunciations did the research lab's correspondents offer in OIBDA's stead?

To get rid of the "Oy" sound implied by the OI in OIBDA, some folks want to just dump the "I." Randy Coker suggests calling OIBDA "OBDA," pronounced "oh-bee-dah." Mrunal "Micky" Jagirdar likes "Operating income eX-Depreciation and Amortization," or OxDa. Bruce Rosner reverses the usual order of "depreciation and amortization" to end up with Operating income Before Amortization and Depreciation, or OBAD.

Unfortunately, we can't imagine that any company would want to de-emphasize income by dropping the "I," so none of these cut it.

Other people like OIBDA, too, but said it should stand for something else. "Only Idiots Believe Dis Accounting," cries Paul Neumann.

More ideas, in order of general plausibility:

  • Operating Income Before Amortization and Depreciation, or OIBAD -- Britt Fair, also Lawrence Herbert, also David Cist.
  • OPerating INcome Before Amortization & Depreciation, or OPINBAD -- Scott Dietz.
  • OPerating INcome WIth No Depreciation or Amortization, or OPINWINDA -- Jim C. Kelly.
  • INcome before Depreciation, Interest, Taxes, and ExtraordinaryMiscellaneous Expenses, or INDITEME -- David Ryan.
  • Earnings Arranged 'Round Whatever Analysts eXpect, or EARWAX -- Tim Dunbar. ("While not exactly grammatically correct," writes Dunbar, "EARWAX, much like many earnings announcements, will make you say, 'Huh?'")
  • Operating Income Cleared of Depreciation Or Amortization, or OICDOA (pronounced "Oh, I see: D.O.A." -- Kelly Clark.

Finally, Shane Hoover writes that with EBITDA, OIBDA and other abbreviations, companies are edging toward simply excluding

all

costs. "You could just call it 'Revenues,'" he says.

"But that likely isn't catchy enough," continues Hoover. "Doesn't quite sound 'technical' enough." So he suggests Revenues -- Includes Performance Liked, Excludes Your

scatalogical noun deleted, or RIPLEYS for short. "Investors can simply choose to believe it ... or not."

Yes, all of these suggestions amused us. But none was the winner. The only expression/abbreviation combo we could conceive any CEO using on a conference call was Operating Income Less Depreciation and Amortization, or OILDA. As in "oil-dah." Sort of rolls off the tongue, we think.

Duplicate winning entries were submitted by Walter Scoggins and Manish I. Shah. Since we received Scoggins' first, he gets his choice of the three books we offered up as prizes, and Shah gets one of the leftovers. Some of you begged for a shot at our brand-new Yahoo! (YHOO) lunch pail, but we're saving that one for a future contest.

5. Band on the Enron


One of the tragedies at Enron, WorldCom, and all those other accounting casualties is that Everybody Knew It. Among numerous employees, it was an open secret, sometimes for years, that the accounting probably wasn't Generally Acceptable.

New proof this week came in the third interim report, released Monday, from Enron bankruptcy examiner Neal Batson. By 1998 -- three years before Enron fell apart -- accounting issues were enough of a topic of conversation inside Enron that someone actually wrote a humorous song about it. And it's possible, writes Batson, that the song was written in 1996; the only copy in his possession is difficult to read.

To save you readers the effort of tracking down the song yourself (it's in Appendix C, starting on page 30), the research lab is happy to reprint the lyrics to the piece, titled "Balance Sheet Blues."

    We got Price Risk Management Assets
    And Liabilities, too
    We got Price Risk Management Assets
    We got the Balance Sheet Blues We got too much debt to be BB
    Just can't find enough cash
    We got too much debt to be BB
    More prepaids will cause us to crash They call us "innovators" (That's right, Rick)
    We got to please the raters (That's right, Jeff)
    Don't feed us to the 'gators (That's right, Cris)
    We've got the balance sheet blues. We got a relative outside the Beltway
    They got enough crude to go around
    If Don can make it do circles
    It won't have to be found We got some friends up in the Big Apple
    They got enough cash to go round
    If Claude can make it do circles
    It won't have to be found.

The author of "Balance Sheet Blues" is unknown, as is the tune. But here's our message to the songwriter, whoever you are: If you'll step forward, the lab will give you the fame you deserve.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon purchases by customers directed there from TheStreet.com.