1. Time to Make Fun of the Doughnuts!
Securities and Exchange Commission
investigation. Falling same-store sales. An unexpected loss. Face it: As each week progresses at
, there's less dough and more hole.
Things got so bad this week that the doughnut retailer -- which Monday reported third-quarter results that were
worse than already-lowered expectations -- wouldn't even take questions from analysts on its conference call.
Instead, the company invited investors to submit questions via email, then later posted a Q&A text on its Web site.
Of course, the A to many of the Q's in the Q&A is basically, "We're not going to tell you." But of the ones that Krispy Kreme answers, our favorite is KKD's analysis of what's gone wrong at its troubled franchisees and joint ventures. In general, says the company, the problem is "(i) operational processes that have not evolved from high opening sales levels to ongoing and sustainable sales levels; (ii) markets that have not aggressively developed all sales channel opportunities; and (iii) overcapacity relative to off premises potential."
In other words, (i) they're not set up to sell the right amount of doughnuts; (ii) they don't sell enough doughnuts; and (iii) they make too many doughnuts. Well, when you're in the doughnut business, that pretty much covers everything, doesn't it?
2. Reality TV Show Bites
Krispy Kreme isn't the only outfit looking a little burnt this week. Take a look at another old favorite,
Trump Hotels & Casino Resorts
As everybody knows, the gaming company headed by Donald Trump filed for Chapter 11 protection Monday. That's the second bankruptcy for The Donald's gambling arm.
But did the company acknowledge it was welshing on its gambling debts? Of course not. Did it mention it's wiping out shareholders again? No, indeed. Instead, the company avoided the ugly truth by saying it had started "recapitalization proceedings."
"It has been a great honor and privilege to deal with and get to know the bondholders and their representatives," Trump said in a statement. "The process has been a very constructive one and should reap great benefits for everyone in the years to come."
Or, as Trump told The Associated Press, "I don't think it's a failure; it's a success. ... It was just something that worked better than other alternatives. It's really just a technical thing."
We should all be so successful.
Somehow, this is reminding us of that wonderfully awful Harrison Ford movie "Regarding Henry" -- the one in which a mean, nasty lawyer turns into a sweet, good man after he has the good luck to be shot in the head.
Say, this nonbankruptcy bankruptcy sounds great! Everybody should do it!
3. You Can't Fool All of the PeopleSoft All of the Time
Speaking of a bankruptcy that isn't a bankruptcy and a conference call Q&A that isn't a conference call Q&A, how about that majority vote that isn't a majority vote?
PeopleSoft's Electoral College
We're talking, of course, about
hostile tender offer to take over rival software company
Over the weekend, Oracle announced that more than 60% of PeopleSoft shareholders had taken Oracle up on its $24-a-share offer. So how did PeopleSoft respond?
Well, it said that the 61% acceptance rate for the tender offer did not, in fact, represent a majority. "Our Board is convinced that a majority of our stockholders agree that your $24 offer is inadequate and does not reflect PeopleSoft's real value," PeopleSoft said in a statement. "This majority is comprised of stockholders who did not tender their shares, as well as stockholders who tendered but told us that they believe PeopleSoft is worth more than $24 per share."
Well, it's great that the board is convinced of all that, but we can't help noticing that 61% there. PeopleSoft seems to be saying that a majority vote can be nullified by whining -- an intriguing theory, but one that we can't say bodes well for corporate governance.
4. Cutting-Edge Reasoning at Sharper Image
Everyone knows you go to
to find that unique item you can't find anywhere else.
You know, stuff like the Ionic Breeze Air Purifier. The $90 aluminum briefcase filled with poker chips. And this season's new, hot item: the creative excuse trotted out during earnings season.
Yes, we're used to the usual rationalizations -- some of them occasionally valid -- that retailers dispense for why they're reporting disappointing sales in a given quarter. The weather was too hot. The weather was too cold. Easter arrived at the wrong time.
But as jaded as we are, we weren't ready for Sharper Image's recent explanation of why some sales were weaker than expected in the quarter ended Oct. 31. The blame, says the company, belongs to the presidential election. "We believe the election activities distracted customers from direct response sales during parts of August, September and October, which we believe was a temporary effect on our business," CEO Richard Thalheimer explained in a statement.
What tripe! Everybody knows the real culprit was the Laci Peterson trial.
Just to be sure we're not missing a trend here, we checked to see whether other retailers were blaming the presidential election. All we could find was an Oct. 12 statement from
warning that sales in the quarter ending Oct. 24 were hurt by several factors, including multiple hurricanes, overall light store traffic and the presidential election campaign.
A Sharper Image spokeswoman says that all that political advertising on TV bumped many of the company's Ionic Breeze infomercials off TV, and made it more expensive for the company to run the infomercials that did air. Plus, she says, election season was a "distraction factor."
Maybe so. And if indeed it was democracy in action that stifled sales of the PowerTie Motorized Tie Rack -- well, that's a cause for bipartisan celebration.
The Holy Grill
5. Grill of My Dreams, I Love You
Finally, a tip of the hat to a Wall Street darling whose Incredible new success confirms that it's a cradle of creativity.
Yes, eBay, which this week enabled the auction of a partially eaten grilled cheese sandwich, said to be 10 years old, containing an image of the Virgin Mary in toasted bread. For $28,000.
The first example of creativity at work: Asserting to the world that the image in question is that of the Virgin Mary. If you ask us, it looks more like Gwen Stefani.
Further examples of creativity at work: All of the related auctions in eBay's "Metaphysical > Psychic, Paranormal" section that the Virgin Mary Grilled Cheese Sandwich spawned.
You had your make-your-own V.M.G.C.S. kit. You had your Virgin Mary Kate and Ashley Olsen Grilled Cheese Sandwich. And -- our personal favorite --
Mr. Ed's Head in a Hamburger Bun auction.
Yes, it isn't tax cuts, intellectual property or increased productivity that's boosting the U.S. economy. The root of the economic miracle is cheese.
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