Crash and Burn
But more cash on hand

1. Skid Row

The milestones are just flying by at General Motors ( GM).

On Thursday, the giant automaker posted its sixth straight quarterly loss. The Detroit company lost $323 million for its first quarter, including a $946 million deficit in its staggering North American operations.

Yet the quarter was widely hailed as a success , as GM lost less money than it did a year ago. The company also added to its cash position as the threat of a strike at supplier Delphi looms despite recent progress there. GM stock, which had lost half its value over the last year, rose 10% Thursday on evidence of at least modest progress.

"The first quarter represented an important milestone in GM and GM North America's turnaround," said CEO Rick Wagoner. "Not only did we see significant improvement in the financial results of all our automotive units, we also announced numerous additional actions to improve our North American competitiveness and liquidity."

Of course, milestone achievements are nothing new at GM. Just two weeks ago the company agreed to sell a controlling stake in its only consistently profitable business, the GMAC lending arm, to investors led by Cerberus capital.

"This agreement is another important milestone in the turnaround of General Motors," Wagoner said April 3 in announcing that pact. Just in case you didn't get the point, presiding director George Fisher added two paragraphs later in the same release, "This transaction along with the other progress GM has been making on its turnaround plan, is an important milestone."

Yes, though the company continues to lose market share and struggle financially, milestones are zipping by with great regularity. Even 2005, when GM took a stomach-churning $10 billion loss , was a milestone year, to listen to Wagoner.

"We achieved a number of important milestones in 2005," he said of the company's Asia Pacific unit in January's fourth-quarter earnings release. "For the first time in our history, we sold more than 1 million vehicles in Asia Pacific, increasing our market share there to 5.8%. And importantly, in China, now the second-largest market behind the United States, GM became the leading foreign brand."

Yes, good work. Now if GM could only persuade more investors that it's not headed for one final milestone: a Chapter 11 bankruptcy filing.

Dumb-o-Meter score: 91. "We think bankruptcy is really a bad idea," Wagoner told CNBC Thursday morning. "The answer is to put more results up like we did this quarter."

To view Colin Barr's video take on PortalPlayer's entry in Five Dumbest this week, click here .

UnitedHealthy and Wealthy
A billion in options here...

2. Loose Change

UnitedHealth ( UNH) is getting sick and tired of all this executive pay chatter.

The Minnesota-based health insurer and some other big companies have been under the gun for possibly giving execs sweetheart deals on stock options. The Wall Street Journal reports that top UnitedHealth execs repeatedly got options priced at or near the bottom of their stock's trading range, making the options more valuable and raising accounting and disclosure questions.

The Securities and Exchange Commission has contacted UnitedHealth about options pricing. This week saw a management shake-up at another possible options backdater, Vitesse ( VTSS).

UnitedHealth says its board is investigating options grant practices and that it believes it acted appropriately. That doesn't mean the company is happy about the attention, though.

"It is extraordinarily difficult and frustrating not to respond to media reports," CEO William McGuire said on UnitedHealth's earnings conference call, The Wall Street Journal reports.

Making things stickier for UnitedHealth is the sheer size of McGuire's haul. UnitedHealth has been a strong performer, quadrupling its bottom line since 2001 and tripling its stock price over three years. But the Journal's report that McGuire is sitting on $1.6 billion worth of stock options had some observers questioning the board's independence.

So McGuire fired back this week by suggesting that the company will suspend options grants to well-off top execs. "It was my recommendation that we consider terminating or slowing down or stopping at least for the foreseeable future stock options for the most senior employees," he told CNBC.

That sounds like a good idea. And as for his personal fortune? "I've never made it a practice of looking for money," McGuire said Tuesday.

Having $1.6 billion in options sitting around makes that less of a priority.

Dumb-o-Meter score: 90. Now McGuire & Co. can look forward to defending a shareholder civil suit on the options grants, too.

3. Apple Shiner

PortalPlayer ( PLAY) is suddenly showing a penchant for understatement.

Shares of the San Jose, Calif., tech company got hammered Thursday after a key product got snubbed by big customer Apple ( AAPL). The company disclosed Apple's decision not to use PortalPlayer's gear on high-end iPods in a terse Wednesday evening press release headlined "PortalPlayer Announces Product Transition Setback."

And quite a setback it was. PortalPlayer shares, already trading well off their 52-week high of $33 and change, dropped 42% Thursday to fetch $13.06.

The stumble comes just two weeks after PortalPlayer celebrated its victory in the EE Times Annual Creativity in Electronics Awards.

"This prestigious EE Times ACE Award recognizes that our comprehensive platform strategy enables our customers to quickly produce differentiated products with the latest multimedia features and intuitive user interfaces that resonate with consumers," CEO Gary Johnson said April 6. "As we leverage our approach into new market areas, we look forward to continuing the enablement of electronics products that people love."

For whatever reason, the enablement didn't resonate with Apple.

Dumb-o-Meter score: 85. Way to leverage your approach, guys.

4. Penny Ante

The New York Times Co. ( NYT) is feeling the pinch of aggrieved shareholders.

Big investors took a shot across management's bow this week by withholding 28% of votes from the company's board slate. A 5.6% holder, Morgan Stanley Investment Management, wants to eliminate the Class B stock that gives the Sulzberger family control of the board despite its tiny financial stake.

"MSIM believes that the dual-class voting at The New York Times Company, which is an exception to the general rule of one-share, one-vote, creates special privileges as well as responsibilities," the firm says in a Tuesday press release. "MSIM contends that the board and management at The New York Times Company have failed to fulfill these responsibilities effectively."

A look at New York Times' stock performance seems to bear the critics out. Shares of the publisher are down 5% this year and have lost half their value since they peaked in June 2002, as online rivals led by Google ( GOOG) and Yahoo! ( YHOO) have grabbed more ad dollars. The stock's plunge means that $1,000 worth of Times shares bought five years ago is now worth $610 or so, plus dividends of around $70.

The Times declines to comment on the board voting or on Morgan Stanley's claims. But the company did reach out to shareholders in a gesture that seems characteristically half-baked. On Tuesday afternoon, the Times raised its quarterly dividend by a penny a share, to 17.5 cents.

"We are pleased that in a challenging advertising environment, the company has remained committed to improving shareholder return through annual increases in our dividend," said Chairman Arthur Sulzberger Jr. "We have grown our dividend by a compound annual growth rate of 7.1% over the last five years. These dividend increases reflect our board's confidence in the Company's long-term growth prospects and our financial position."

Sorry, but it's plain to see that no one else shares that confidence.

Dumb-o-Meter score: 82. Sulzberger is looking a bit pound-foolish.

Chambers of Arabia
Cisco and the Connected Kingdom

5. Prophet Margin

Cisco ( CSCO) is ready to strike black gold.

With the price of oil soaring into the low $70s, Cisco said Tuesday it would invest $265 million over five years in Saudi Arabia. Cisco plans investments staffing, leasing and finance, innovation hubs, public-private partnerships, education and philanthropy.

The Arab nation is the world's 29th largest economy and proud owner of a quarter of the world's oil reserves. But that's not what appeals to the San Jose, Calif., company's big-picture CEO, John Chambers (pictured at right).

"Saudi Arabia is experiencing a transformation as it expands its economic growth opportunities into new sectors using information technology," Chambers says. "Today's announcement of our investment plans in Saudi Arabia reflects our alignment with the country's focus on entrepreneurship, innovation and education, which we believe will help drive the 21st century global economy."

Entrepreneurship and innovation may not yet be synonymous with Saudi Arabia. For now the kingdom may be better known for sex segregation, corporal punishment and religious restriction. But as always, Chambers is seeing well into what is certain to be a bright and profitable future.

"As Saudi Arabia transforms itself into a Connected Kingdom, it is well-positioned to leapfrog more traditional markets in terms of technology adoption," Cisco's press release blares. "A recent Momentum Research Group study aimed at measuring the productivity effect of IT compared government and healthcare operations and services in Saudi Arabia to countries in Europe. The study found that Saudi Arabia was leading European countries in several areas, including the adoption of new technologies such as IP telephony and voice over IP and had a larger increase in the number of citizens using their services."

Let no one accuse Cisco of repressing the profit motive.

Dumb-o-Meter score: 75. Who knows, Chambers may call oil Texas Tea.
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