Chaser
This ice water's for you

1. Water World

Anheuser-Busch ( BUD) just got bounced from its own rockin' party.

This week the maker of Budweiser and Bud Light ended a popular tavern promotion after some participants inexplicably kept choosing the wrong drink. The game, Bud Pong, encouraged bar-hoppers to play table tennis while drinking water.

The St. Louis-based brewer says it devised Bud Pong "to create an interactive experience for contemporary adults at bars and clubs, where adults must be 21 and older to participate." That sounds like a winning formula, as countless adults use bars as an excuse to interact under the influence of water.

But even the best-laid plans of well-hydrated companies can end in big hangovers. Anheuser, which previously has pledged to keep beer fun and social , awoke to that unpleasant reality Tuesday.

"It has come to our attention that despite our explicit guidelines, there may have been instances where this promotion was not carried out in the manner it was intended," chief flack Francine I. Katz said in a press release. "As a company that has invested more than $500 million to promote responsible consumption among adults and to discourage abuse, we believe it is important that our intentions with Bud Pong not be misperceived."

Don't worry, it's all water under the bridge to us.

Dumb-o-Meter score: 95. "Abusive drinking by college students has caused the nation to examine ways we can avoid these kinds of senseless tragedies," Anheuser-Busch says on an informative Web site, beeresponsible.com , which despite its title fails to name any responsible bees.

To view Colin Barr's humorous video take on the sport of beer pong, click here .

Pro-Bonehead
Goldman lends Refco a free hand

2. Heart of Goldman

As badly as things have turned out for Refco ( RFXCQ), the big futures brokerage may not strike you as a charity case. That is, unless you're Goldman Sachs ( GS).

Refco filed for Chapter 11 bankruptcy protection this week after its former CEO was charged with securities fraud . Prosecutors allege that Phil Bennett misrepresented the financial health of the firm by concealing $430 million in bad loans. The events relegated Refco to the land of penny stocks just weeks after the healthy-looking firm sported a $3.6 billion valuation.

Goldman, the New York finance giant, was an underwriter of Refco's Aug. 11 initial public offering, which lined the pockets of Bennett and controlling shareholder Thomas H. Lee Partners. When Refco tanked last week, Goldman raised some eyebrows by briefly signing on as a financial adviser to the firm. The Wall Street Journal reports that Goldman said it was acting as a "pro bono" crisis adviser to Refco.

Of course, selflessness is nothing new at the big investment bank. "The people of Goldman Sachs take very seriously their responsibility to the communities in which they live and work," Goldman's Web site notes. "Besides being responsive to community needs, Goldman Sachs has a long-standing tradition of leadership in philanthropy through various organizations worldwide."

That said, pro bono work is usually that done on behalf of "persons of limited means, or charitable, religious, civic, community, governmental and educational organizations in matters which are designed primarily to address the needs of persons of limited means," the American Bar Association says. Refco -- still backed by deep-pocketed Lee and others -- doesn't seem to fit that definition.

Whatever motivated it, Goldman's latest brush with public service was brief. Refco said Monday in filing for bankruptcy that Goldman's advisory term had been terminated .

Apparently five days was enough leadership for the Refco community.

Dumb-o-Meter score: 90. "I'm English," a spokesman notes in explaining his word choice. "We had to learn Latin."

Kodak's Negatives
Its report isn't a pretty picture

3. Confidence Man

Regardless of what its various chieftains say, we're getting the picture that Kodak ( EK) is in bad shape.

The Rochester, N.Y., photo company posted a third straight earnings debacle this week. The company lost more than $100 million on a pretax operating basis where analysts had been expecting a healthy profit. Kodak also got hit by a $900 million tax valuation charge. All told, it lost more than a billion dollars for the third quarter.

The news comes as Kodak makes massive job cuts amid an overhaul of its business, which has long focused on film sales but now centers on digital imaging. Earlier this year, massive earnings shortfalls forced Kodak to change CEOs and promise even more firings .

But when it comes to digital imaging, Kodak insists, the news is not as bad as it may appear. While digital earnings were just $10 million for the quarter -- a drop in the bucket where that billion-dollar loss is sloshing around -- excluding various costs will show a digital profit of $42 million.

"In the third quarter, our digital revenue exceeded our traditional revenue for the first time on a quarterly basis, representing another milestone in our digital transformation," said current chief Antonio Perez. "As importantly, on the basis outlined above, our digital earnings were 3.5 times greater than in the year-ago quarter, and September's significant improvement increases our confidence for strong digital earnings in the fourth quarter."

Of course, this isn't the first time Kodak has sounded that note. "While the first quarter's performance was disappointing, such short-term volatility is to be expected as we transform Kodak into a digital company," then-CEO Daniel Carp said in April.

Kodak's track record increases our confidence that the coming months will bring more short-term volatility.

Dumb-o-Meter score: 85. Most of Kodak's recent milestones have been pretty ugly.

For the Birds?
Vaccine shortfall symptomatic of Chiron

4. Flu Bugs

Chiron ( CHIR) got bitten again this week.

The good news out of Emeryville, Calif., was that the biotech concern began shipping flu vaccine just as the nation gears up for the ever-looming influenza pandemic. That marks a welcome change from last flu season, when Chiron produced no vaccine after a U.K. plant was shut down by health regulators for manufacturing problems and product contamination.

"This year, Chiron devoted more than half of the normal production season to the implementation of our remediation plan," said CEO Howard Pien. "We are delighted to be back, and we look forward to contributing meaningfully to the influenza vaccine supply this year."

The bad news is that for the third time this year, Chiron cut its vaccine-making target. The company expects that "the total number of Fluvirin vaccine doses it will produce for the 2005-2006 influenza season will be below its previously stated range, due to production delays related to remediation as well as lower production output associated with adaptation to new processes and procedures implemented in remediation," Chiron said Monday, promising more information later.

Setbacks like these are nothing new for Chiron. The company warned in April that it was aiming to make just 25 million to 30 million doses of Fluvirin, compared with the more than 50 million doses it produced in 2004. In June, the company cut the 2005 season target to 18 million to 26 million doses of Fluvirin.

Pien isn't letting the vaccine-production shortfall color his commentary, though.

"Chiron recognizes the value of influenza vaccines and their important role in public health, not just for the annual flu season but also as the foundation for pandemic preparedness," the CEO said. "We are pleased to be able to reiterate our mission to contribute to protecting people against influenza and will strive to provide innovations that could help to deal with the threat of pandemic."

Not a moment too soon. One welcome innovation might be less talk and more vaccine.

Dumb-o-Meter score: 82. It's nice when a flu vaccine company recognizes the value of flu vaccines.

5. Millrace

Calpine ( CPN) investors are on edge lately. This week the stock got routed after the company took the unheard-of step of hiring some lawyers.

On Tuesday the New York Post reported that the cash-strapped San Jose, Calif., power company had hired a high-profile restructuring team from Kirkland & Ellis. The Post said the hiring was probably another step in the company's legal wrangling with creditors and didn't necessarily point to an imminent bankruptcy filing. Even so, the news knocked 16% off Calpine's shares in heavy trading.

So Tuesday afternoon, Calpine -- a favorite subject of TheStreet.com's Stocks Under $10's Will Gabrielski, who has zeroed in on its massive debt load and limited liquidity in his RealMoney.com columns -- stepped in to explain that it had been working with Kirkland for some time and to assure investors that a Chapter 11 filing wasn't imminent. "While it is not Calpine's policy to respond to market rumors or discuss our outside counsel, we feel compelled to comment today to quell market rumors that may be placing unwarranted pressure on Calpine's equity and bond securities," Calpine said.

"There was a lot of innuendo" surrounding Tuesday's story, a spokeswoman adds, pointing to the stock's volatility that day. "The concern was over Chapter 11, and the nature of what we were working with Kirkland about."

Judging by the stock's failure to bounce much after Tuesday's comments, it looks like Calpine may yet have a lot more rumors to quell.

Dumb-o-Meter score: 72. On the bright side, at least the rumor mill is energy-efficient.
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