1. Ours Not to Reason Vioxx

It was only a month ago that

Merck

(MRK) - Get Report

was

furiously disputing a study that linked Vioxx and heart attacks.

"Merck Stands Behind the Efficacy, Overall Safety and Cardiovascular Safety of VIOXX," the company announced in an Aug. 26 press release. Merck "strongly disagrees with the conclusions" of an FDA-funded Kaiser Permanente study released earlier that week.

One of those conclusions, to refresh your memory, was that a high daily dose of Vioxx (used to treat arthritis and acute pain) increased the risk of heart attack and sudden cardiac death by more than three times. More important, a smaller, typical dose of Vioxx increased the risk of heart attack and sudden cardiac death compared with

Pfizer's

(PFE) - Get Report

Celebrex, the Coke to Vioxx's Pepsi in the pain-relief market.

That wasn't the first time that people published suspicions of a link between Vioxx and increased cardiac-health risk, and that Merck denied it.

Back in April 2000, when

Reuters

published a story discussing the links between Vioxx and heart attacks, Merck said, no way. "In response to speculative news reports," the company said, "Merck & Co., Inc. today confirmed the favorable cardiovascular safety profile of Vioxx."

Of course, all that changed Thursday, when Merck pulled Vioxx from the market, citing new evidence of increased cardiac risk from using the drug. Investors pushed Merck's stock down 27%.

Just goes to show you one of the classic truths on Wall Street: Whatever a company says is true has to be true. Until, of course, the company says it isn't.

2. The New Travelzoo Review

Online publisher

Travelzoo

(TZOO) - Get Report

had a funny message for everyone who pushed the stock up beyond $76 last week.

You overpaid.

On Thursday,

the online publisher announced a deal to sell 750,000 shares to various unnamed investors in a private placement. The shares were priced at $40 apiece -- a 31% discount to Wednesday's closing price of $58.07.

Which sort of makes you wonder: If the folks at Travelzoo are willing to sell what is basically a 4.6% stake in the company at a 31% discount, what are current buyers doing paying full retail?

And why wouldn't the stock -- which dropped on news of the deal -- drop even further? Shares closed at $52 Thursday, down 10% for the day but still at a 30% premium to the price paid by the presumably savvy private placement buyers.

One might almost get the feeling that the recent run-up in Travelzoo's stock -- five months ago, the online publisher was trading below $10 -- is utterly unjustified, nothing more than a flashback to the turn-of-the-century Internet bubble.

Discounting Travelzoo

To clear up some prior confusion, we must point out that Travelzoo isn't a company that sells travel online like

Orbitz

(ORBZ)

or

IAC/InterActiveCorp's

(IACI)

Expedia.

Rather, Travelzoo, which posted $13.7 million in revenue for the first half of the year, is an online publisher -- an online ad-seller that, its management strives to point out, resembles

Google

(GOOG) - Get Report

more than it does Orbitz.

Hmmm. A hot stock whose rising price seems increasingly hard to justify? Yeah, we see the resemblance.

3. Some Pen Names, if You Will

Martha Stewart, we learned Wednesday, will soon embark on a five-month involuntary sojourn in West Virginia.

We assume that the founder of

Martha Stewart Living Omnimedia

(MSO)

will have a grand old time. But just in case she doesn't, we at the research lab have come up with something to cheer her up: a fun little quiz.

Yes, nothing takes your mind off a prison term like a brainteaser. And this one should have special, uh, appeal for Martha, because it's designed to test knowledge of litigation vocabulary she may have picked up over the past three years.

Specifically, it's designed to test Martha's knowledge of famous names in the legal system. Not the people who, like Martha, were famous before getting into trouble. No, this is a quiz mostly about the relative unknowns who became famous

after

they got into trouble, by lending their names to various legal notices and milestones.

So, Martha -- and everyone else who is playing along -- just match the famous-name legal terminology in the first list to the definitions in the second list. (The answers come at the end of the column.)

If you get all six correct -- well, either you're a lawyer, or you know enough to fire the one who's defending you.

4. HealthSouth, Wealthy and Wise

Speaking of legal troubles, Richard Scrushy got reindicted this week.

The former CEO of

HealthSouth

faces new perjury and obstruction of justice charges,

The Associated Press

reported Wednesday.

At the same time, the government -- perhaps afraid of alienating a jury with a

Tyco

-esque overdose of charges through which to plow -- reduced the total number of charges Scrushy faces from 85 to a more manageable 58.

"What a great day it is for Richard Scrushy today," said Scrushy's attorney, Jim Parkman, according to

The Birmingham News.

"We came in here with 85 counts in the indictment, and we stand before you with 27, nearly 35% of this indictment gone."

We should all have defense lawyers who are that upbeat.

But given the fact that 17 other executives at HealthSouth have pleaded guilty, and given some fascinating evidence mentioned in the recent indictment, and given the fact it took only four counts to send Martha up the river -- well, this optimism resembles that of a condemned man facing a firing squad who confidently says, "This will turn out fine, since one of you is firing blanks."

5. Women Drive GM Crazy

For anyone who wonders whether automakers can improve their relationship with female customers, we have an answer.

It lies in comments made recently by

General Motors

(GM) - Get Report

Vice Chairman Bob Lutz.

Lutz,

Reuters

reports, was asked whether the design of a car's interior wasn't as important as a car's exterior in making the auto desirable.

"What do you want in a female companion?"

Reuters

reports him as responding. "What is the first thing that attracts you? Her ability to cook and keep house or is it the way she looks?"

Continued Lutz, "It's not politically correct, GM hates it when I draw that analogy. But it's absolutely correct. ... The initial pull comes from the exterior appearance."

Whether GM hates it or not, we don't know; a GM spokesman declined to comment on Lutz's comments.

But we've got a few comments of our own. For starters, can that really be Lutz's idea of what lies beneath the surface of a woman? Her ability to cook and clean? Is that all he thinks there is?

Or, given that the issue was about a car's exterior vs. its interior design, wouldn't Lutz's proper analogy be to a female companion's physical appearance vs. a CAT scan of her internal organs?

Maybe the reason GM hates the analogy has nothing to do with political correctness; maybe it's because the analogy makes no sense.

We notice that GM sporadically makes an effort to reach out to female car buyers -- for example, in a pamphlet entitled "Women in the Driver's Seat."

Available online, the guide, among other things, suggests women avoid dealerships where "you are being patronized or 'talked to.'"

Or, we might add, where the salesman is talking crazy.

Answers to Martha Stewart quiz:1. e; 2. d; 3. c; 4. a; 5. f; 6. b.

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