The Five Dumbest Things on Wall Street This Week

Abercrombie Gets Bitten

Sleep tight, Abercrombie & Fitch ( ANF) shareholders. The cimex lectularius have apparently stopped biting.

Yeah, we're talking bedbugs, people.

Abercrombie's stock sank 2.5% on July 2, far outpacing the Dow's fall, on news that the preppy teen clothes-seller had closed a second store in New York due to a bedbug infestation. Those little bloodsuckers (literally) forced Abercrombie to shut its SoHo New York outpost Thursday, which was followed by a closing of its South Street Seaport site Friday for the same reason. The SoHo store reopened Saturday, while the South Street location stayed shut through the long holiday weekend.
Abercrombie and Fitch

The stock performed better Tuesday on the news the SoHo store was back in business, while Abercrombie spent its time petitioning New York City's mayor's office for help in dealing with the problem.

Oh come on! For a company that prides itself on its marketing savvy, Abercrombie really has us scratching our heads with its clueless behavior. And we assure you it's not due to tiny critters feasting on our scalps.

If Abercrombie really wants to say good night to its bed bug problem, it should spend more time stamping out insects in its inventory and less time crying to City Hall.

Otherwise, it should just change its name to Abercrombie & Fidget and forget it.

Dumb-o-meter score: 75 -- Yes, this story was not only dumb, but gross.

World Cup Runneth Under

Thank you, South Africa, for hosting a memorable World Cup. Long will we remember the glorious goals, ignominious calls and cacophonous vuvuzuelas of the 2010 tournament. And may the spirit of fair play and global kinship survive within your borders long after the last group of fans has flown away.

Why, you wonder, are we so nostalgic even before a winner is crowned this weekend?
Soccer City Stadium

Simple, because once that last batch of Dutch and Spanish supporters says goodbye, South Africa will be looking at one heck of a hangover for this global soccer party. Similar to Greece after its turn as Olympic host, South Africa will be hard pressed to recoup the billions of dollars it spent building and renovating stadiums.

And if they do fill the stands of those soon-to-be white elephant stadiums, it will be for another sport entirely, said Jean-Francois Mercier, an economist at Citigroup in an interview on Bloomberg.

"The problem with soccer in South Africa is that it is not a high-paying spectator sport or a high sponsor-attracting sport," said Mercier to Bloomberg. "Using some of these stadiums for rugby matches could help."

Of course rugby is a sport primarily popular with the white wealthy elite, as opposed to the poor black majority that has been filling the stands to capacity for the monthlong soccer tournament. South African President Jacob Zuma, however, said in an address that those stadiums will inevitably pay for themselves, maybe with an Olympic bid.

"I don't think anyone today would say no if South Africa said 'Let us have the Olympics,' because they know we have got the facilities," Zuma said.

After seeing the financial destruction in Greece after it hosted the 2004 Summer Games, we should give Zuma a red card just for even thinking about it.

Dumb-o-meter score: 80 -- Anybody want to rent out a 68,000-seat stadium in Cape Town? They can refit it for wedding and bar mitzvahs!

Anadarko Trips Up

In your dreams, Anadarko ( APC) shareholders. That's where your stock traded at a price of $99,999.9999. Not on the NYSE ( NYX), Nasdaq ( NDAQ) or IntercontinentalExchange ( ICE), but in your wildest, most blissful dreams.
Anadarko Petroleum Corp.

Shares of the oil and gas driller were halted on the New York Stock Exchange on Tuesday after they became the latest to trip the newly instituted "circuit breakers" for individual stocks, joining the likes of The Washington Post ( WPO) and Citigroup ( C). The NYSE said the stoppage was triggered when a trade of 200 shares took place on the NYSE Arca exchange at a clearly inflated price of $99,999.9999, a level way above the prior trade at $39.14.

According to the NYSE, the circuit breakers kick in when an S&P 500 stock moves more than 10% in a five-minute period, resulting in a five-minute trading halt. The rules were ushered in as a result of May's still unsolved flash crash.

Making the price all the more fantastic was news out this week that BP ( BP) is pressing Anadarko to help foot the bill for the Gulf oil spill, a cleanup tab now greater than $3.12 billion. Anadarko holds a 25% stake in the Macando well, and its shares have lost almost half their value since the rig exploded April 20.

So despite the brief vision of a heavenly stock price, the nightmare at Anadarko continues.

Dumb-o-meter score: 85 -- Don't come on down Anadarko shareholders. The price was not right.

Un-Skilled Jury

Let's be serious, folks. Even if Skilled Healthcare Group ( SKH) shortchanged its patients' valuable health care time, it's hard for us to believe the punishment fits the crime when the only casualty was the company's stock price.

Shares of the nursing home operator sank more than 70% on Wednesday after a California jury ruled that the company would have to pay $671 million in damages for not providing sufficient nursing care to patients. The victorious class-action suit, filed four years ago, alleged that the company had violated California's health and safety code by not providing the minimum 3.2 hours of direct nursing care per day to patients at 22 of its facilities.

 Un-Skilled Jury

The jury has yet to hear the punitive-damages phase of the trial and will continue to further deliberate. That did not stop Skilled Healthcare CEO Boyd Hendrickson, however, from attacking the decision, which may force his company into bankruptcy.

"We strongly disagree with the outcome of this legal matter, and we intend to vigorously challenge it," Hendrickson said.

Sure Boyd, like you have a choice in the matter. As a result of the verdict, Skilled will be required to post a bond for 150% of the final judgment amount, which means $1 billion. According to our crude math, that's quite a bit more than the measly $2 million the company has in cash or the $94 million it can tap from its revolving credit facility.

Skilled certainly won't be able to earn its way out of the jam in time. Annual revenue at the 14,000-employee company amounted to $760 million at last check.

So unless that ridiculous award gets knocked down, Skilled Healthcare will most certainly get knocked out.

Dumb-o-meter score: 90 -- There won't be a health care system to reform if we get more jury awards like this one.

Bye-Bye, Blockbuster

Roll the credits, boys. Blockbuster ( BLOKA.PK) is leaving the building.

The humbled movie rental chain officially lost its coveted place on the NYSE Wednesday. The delisting move comes a week after shareholders failed to approve a recapitalization plan, which included combining Class A and Class B common stock, or the option for a reverse stock split, which was necessary to comply with listing requirements. Blockbuster is trading on the Over-the-Counter Bulletin Board under the ticker BLOKA.PK.

Yep, sad to say, we here at The Five Dumbest Lab won't have Blockbuster to kick around anymore. Maybe when the movie comes out about how the once dominant company self-destructed we will rent it on Netflix ( NFLX) or one of the other competitors that stole Blockbuster's business while it was busy imploding.

While it no longer trades on the Big Board, Blockbuster has not gone bust, mind you. It failed to make a debt payment July 1, but avoided bankruptcy by winning a crucial one-month reprieve from its obligations to its creditors, now totaling around $440 million.

If CEO Jim Keyes does not come up with a fairytale ending by early August, however, the curtain will fall on Blockbuster for good.

Dumb-o-meter score: 95 -- No longer will Blockbuster have its name in lights on Wall and Broad.

Before joining, Gregg Greenberg was a writer and segment producer for CNBC's Closing Bell. He previously worked at FleetBoston and Lehman Brothers in their Private Client Services divisions, covering high net-worth individuals and midsize hedge funds. Greenberg attended New York University's School of Business and Economic Reporting. He also has an M.B.A. from Cornell University's Johnson School of Business, and a B.A. in history from Amherst College.

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