1. FDA: Not Dysfunctional, Just, You Know, Uh, Sluggish
We used to think the Dumbest things in the erectile dysfunction pharmaceuticals business were the Cialis advertisements in which a man and woman relax in his-and-her claw-foot bathtubs out on the back lawn.
The idea, we suppose, was to illustrate a passion rekindled. But all we could think was, "Who puts bathtubs in their back yard? And how are they not freezing their butts off?"
Furthermore, when Cialis marketers Lilly (LLY) - Get Report and Icos( ICOS) launched another ad -- this one starring a man, a woman, a glass of red wine and a claw-foot bathtub -- we thought, "OK, who at Lilly Icos has a thing for vintage plumbing?"
Anyway, that was then. This week the Dumbest thing had to be the letter from the Food and Drug Administration to Pfizer about its Viagra advertising. You know that ad -- the one that ends with a man pulling his tee-heeing wife into a lingerie store.
There's nothing Dumb with the content of the letter, which requests that Pfizer cease the advertisements immediately. The FDA chastises Pfizer for making unsubstantiated claims for Viagra and omitting its risks.
No, the problem is the date of the letter: Nov. 10. That's nearly three months after Pfizer began airing the ad 800,000 times (by our count). It's a replay of
last year's episode in which it took the FDA four months to complain about
dancing toenail-creature ads.
Pfizer says it plans to modify the ads to address the FDA's concerns. But how's that supposed to correct the wrong impressions people have gotten about Viagra after three months of the old ad?
We asked the FDA why they were so slow on the trigger, but -- believe it or not -- they weren't quick enough to respond by our deadline.
2. You're Either On the Bus or You're Off the Bus
The rich are very different from you and me. But not all of them have the guts to admit it.
That issue came up this week in the
trial focusing on the mid-1990s hiring and firing of Michael Ovitz as chief operating officer.
Testifying about Ovitz on Tuesday, Disney CEO Michael Eisner said Ovitz came off as a little snooty.
A vivid example of hoity-toitiness came at a corporate retreat at Walt Disney World in 1996, Eisner said. "We'd all take a bus and he had a limousine, a special driver,"
reports Eisner as saying.
"The perception was that Michael Ovitz was a little elitist for the egalitarian Walt Disney World employees in Florida," Eisner testified.
Or, as the
Los Angeles Times
reported from Eisner's testimony, "He was in a non-Hollywood environment acting a little special."
Well, that's rich -- the idea of one Hollywood executive accusing another Hollywood executive of not having the common touch. As if they're all taking public transportation to the office in Burbank.
OK, OK. We're not being precise here. As far as we can infer from Eisner's comments, the Disney CEO was, in fact, accusing Ovitz of not being able to pretend he had the common touch while he was on the road with other executives. Apparently, that limo-loving behavior is perfectly acceptable back in Hollywood.
As for us, we applaud Ovitz's evident inability to adapt to his surroundings. We figure that's the way he managed to walk away with the $100-million-plus compensation at issue in the trial: It was his movie at Disney, and everyone else was just a supporting actor.
3. To Borrow and to Borrow and to Borrow
Wall Street's watchdogs, we suspect, face the same threat that stand-up comedians do on open-mike night: If you're too good, one of your competitors will steal your best lines.
We make that assertion following Monday's announcement by the
Securities and Exchange Commission
that it was filing fraud charges against Conrad Black and David Radler, the former CEO and COO, respectively, of newspaper publisher
( HLR). The SEC says Black and Radler defrauded Hollinger International's public shareholders of $85 million.
One Enforcer's Piggy Bank ...
Or, as SEC enforcement director Stephen M. Cutler put it, "Black and Radler abused their control of a public company and treated it as their personal piggy bank."
Boy. "Personal piggy bank." That's a memorable line. So memorable, in fact, that we remember it being used before in a high-profile fraud case: the July 2002 criminal indictment of Adelphia Communications founder John Rigas. Back then, U.S. postal inspectors and the U.S. attorney's office accused the Rigas family as using the cable company as "their personal piggy bank."
That was the money quote, so to speak. All the newspapers led with it in their coverage of the Adelphia indictments. Cutler, who issued a statement that same day in 2002 related to the SEC's case against the Rigases, had nothing to say that was quite that riveting.
Nor did Cutler rivet later in 2002 on the day that former
executives were hit with various criminal charges. "Kozlowski, Swartz and Belnick treated Tyco as their private bank, taking out hundreds of millions of dollars of loans and compensation without ever telling investors," Cutler was widely quoted as saying. Sorry, Stephen: "private bank" just doesn't scream "evil" as much as "personal piggy bank" does.
Which is why, we suppose, Cutler went whole hog with the piggy bank metaphor this past Monday. If imitation is the sincerest form of flattery, the guys at the U.S. attorney's office must feel very flattered indeed.
4. Netflix Homes In on the Range
Companies are always blaming Wall Street for its shortsighted focus on quarterly numbers.
Well, guess what: Sometimes encouragement for this arguably unhealthy obsession comes straight from the companies themselves.
Exhibit A is an announcement issued Wednesday by
, the mail-order DVD rental company.
In Wednesday's press release, Netflix issued changes to its fourth-quarter guidance -- forecasts the company originally made on its Oct. 14 conference call.
Instead of fourth-quarter net income in the range of $2 million to $6 million, Netflix now predicts a range of $2 million to $5 million. In place of the prior earnings per share range of 3 cents to 9 cents, the company now expects EPS between 3 cents and 8 cents.
Get that? Netflix is cutting a million off the top of the net income range, and a penny off the top of the EPS forecast. Given that the low end of expectations remains the same, and given that the top end falls within the prior range, one has to ask oneself, Was This Press Release Necessary?
Even more pointless is another part of Wednesday's outlook revision, where Netflix adjusts its expected revenue from a range of $138 million to $142 million to a range of $139 million to $143 million. Just to do the math for you, that translates into an adjustment of 0.7%.
If a company wants to nitpick like that, it's only begging for analysts to do the same.
5. Mind Your Owens Corning Business
have been on a tear of late. Over the past two weeks, shares of the building materials company have quintupled, going from a close of 54 cents Nov. 2 to as high as $2.74 Thursday.
That makes no sense, a reader going by the name of Richard Awnoc pointed out to us. As a matter of fact, the company as much as said so.
Owens Corning, engulfed in asbestos litigation, pointed out in a press release earlier this month that it expects "the existing common stock of Owens Corning will be canceled, and that current shareholders will receive no distribution or other consideration in exchange for their shares."
Makes it pretty hard to build a case for at least one surging penny stock.
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