The 5 Dumbest Things on Wall Street: Sept. 17


5. Cell Therapeutics, Have You No Shame?

Cell Therapeutics (CTIC) CEO Jim Bianco has managed to bring together the dumb and the despicable in truly spectacular fashion this week.

With his company on the brink of bankruptcy, Bianco set out to beg from the group of people he has hurt the most over his career -- his own company's shareholders -- and ask them to approve a plan to increase the number of company shares to 1.2 billion from its present level of 800 million. To get this approval, Bianco borrowed a page from the Jerry Lewis telethon playbook.

"We all have family or friends who have been struck down by cancer. At CTI, we believe we can make cancer more treatable for many cancer patients by advancing the products in our development pipeline; that is our mission," read a letter signed by Cell Therapeutics' CFO Louis Bianco, the brother of the CEO, and sent to shareholders recently.

>>Cell Therapeutics Begs for Survival

"We are committed to bringing our drugs to cancer patients, but CTI needs your support," the letter continues. "Your vote can help us make a difference in the potential success of these drugs and in the lives of the patients who could someday benefit from them. Without your voting support, CTI may not be able to continue this research."

At the top of the letter is a new company logo with a slogan that reads, "Please Vote. Help Make Cancer More Treatable."

It's a noble cause, for sure, but Cell Therapeutics isn't a charity -- and Bianco's management has been anything but charitable to shareholders. Since 2005, shares of Cell Therapeutics have plunged more than 99.9%, hit again and again by clinical trial blowups and drug approval rejections. The only biotech firms that have caused greater shareholder losses over this time period are no longer in business.

And as far as the company's mission of making cancer more treatable goes, one could argue they're farther away from achieving that than ever. The U.S. Food and Drug Administration savaged the company's lead lymphoma drug pixantrone in its review in March, which was followed by a unanimous 9-0 vote against the drug by the FDA's outside advisory panel and then a formal rejection of the drug by the agency. As a result, the company will be forced to conduct a new study here while it tries in vain to get the drug approved in Europe. Cell Therapeutics' other main cancer drug, Opaxio, has failed repeated phase III studies.

Bianco and his management team seem to be in no danger of sharing in their company's misfortune. Bianco's total compensation spiked to $12.6 million in 2009, up from $1.5 million in 2008 and $2.2 million in 2007. Brother Louis was awarded $5 million in total compensation last year, while two executive VPs and the company president received between $3.9 million and $7.4 million.

TheStreet Says: You play the "C" card, and we'll play the "D" card.

4. Starbucks Makes a Grande Gaffe

Did Starbucks ( SBUX) learn nothing from McDonalds ( MCD) and its Super Size fiasco?

In recent weeks, caffeine-deprived drivers looking to get their fix via a Starbucks drive-through window began to notice that something was missing on the menu. Sure enough, this week Starbucks acknowledged that its new drive-through menu design omitted their version of the small beverage, the tall, in favor of listing only the grande and venti sizes.

Of course, this was not an attempt to steer consumers towards bigger, more expensive drinks. How dare you even suggest that! No, Starbucks was only giving consumers what they wanted, and you could still order a tall if you, you know, actually wanted it. And you knew that they still existed.

"We are not being sneaky," Starbucks spokeswoman Deb Trevino told USAToday on Monday. "We did it because our customers were frustrated with the difficulty of reading our drive-through menus."

Uh... huh.

And difficulty with the drive through menu? Really, just the drive-through? According to full-page advertisements Starbucks ran in the Wall Street Journal and the New York Times in 2008, there were 87,000 possible drink combinations to choose from. Apparently consumers are mentally equipped to navigate that if they're standing on terra firma, looking longingly over the counter into the eyes of their favorite barista. But put them in a car, outside, exposed to the elements with only the cold glare of a drive-through menu to work with and ... well, it's obvious that the tall is to blame.

By Thursday, Starbucks felt that perhaps the presence of the tall wasn't to blame after all. A company representative notified Consumerist.com -- where the buzz about the issue had been gathering frothy, milky steam all week -- that the tall would be making a return to drive-through menus by Thursday.

"On Aug. 31, Starbucks introduced the simplified menu, based on customer feedback, but since that time, we've heard people missed seeing the Tall beverages on the menu," the rep told Consumerist. "While the Tall size has always been available at Drive Thru, along with every item on Starbucks full menu, we want to clear up any confusion and ensure our menu reflects a range of price points."

Whew! Glad the confusion over the confusion has been cleared up.

TheStreet Says: Now, if only they could start calling the tall what it is -- a short.

3. A High Fructose Corn Syrup By Any Other Name...

The problem with high fructose corn syrup isn't that the Mayo Clinic and other health professionals say it's linked to obesity, diabetes, high blood pressure and coronary artery disease.

Nah, it's just got a bad name.

The Corn Refiners Association, a group that includes Archer Daniels Midland ( ADM) and Cargill, would like to change all that in the simplest way possible -- by changing the name. The CRA announced this week that it is petitioning the U.S. Food and Drug Administration to allow manufacturers to swap the name HFCS with "corn sugar" on ingredient labels.

The CRA would like to "help clarify the labeling of food products for consumers," said the group. According to the CRA, HFCS is no different than regular table sugar.

"The term 'corn sugar' succinctly and accurately describes what this natural ingredient is, and where it comes from -- corn," said CRA president Audrae Erickson.

The CRA is undoubtedly losing the PR battle on high-fructose corn syrup. Starbucks, Kraft Foods ( KFT) and even ConAgra Foods' ( CAG) Hunt's ketchup have removed HFCS from some or all of their products. This, despite more studies suggesting that HFCS may not be as bad as it's been made out to be. But rather than attack this issue purely on the merits of science, the CRA has opted to go the way of Altria ( MO) and Xe (formerly known as Phillip Morris and Blackwater, respectively).

Ironically, this isn't the first time the corn industry has pushed for the "corn sugar" name change. In a column for Advertising Age published in June, marketing executive Al Ries recounted working with CPC International, then know as Corn Products Co., in the 1970s. Even then, wrote Ries, it was recognized that the HFCS moniker was a detriment. Informal talks with the FDA about calling it sugar were firmly shot down.

Still, Erickson told AdAge this week that she was confident the FDA would approve the name change. That said, she also pointed out that the FDA has only approved an ingredient name change twice before: in 2000 prunes were granted the right to be known as dried plums; and euceric acid rapeseed oil was, thankfully, dubbed canola oil in the late 1980s.

TheStreet Says: You know that things are bad for your product when you're desperate to be called something that most eaters have been trying to avoid for generations.

2. Buffett: Everybody Listen to Me. Now Don't.

Berkshire Hathaway ( BRK.B) CEO and don of old school American capitalism Warren Buffett predicted on Monday that there will be no double-dip recession and that things are A-OK with the U.S. economic recovery.

Buffett, of course, is the carnival barker for U.S. capitalism, calling all Americans to show conviction in their nation's financial future. He's backed this sentiment up in action as well, from saying Berkshire Hathaway's acquisition of railroad Burlington Northern was a bet on the U.S. economy, to investing in Goldman Sachs ( GS) at the worst moment of the financial crisis as a way to use his financial might to restore faith in the U.S. financial system.

>>>View Warren Buffett's Portfolio

Still, there's a big difference between investing billions of dollars in railroads or an investment bank and opining on the future of the U.S. economy. Buffett put his money where his mouth often is in the case of Burlington Northern and Goldman Sachs, but should it matter to investors when he offers them rah-rah quotes about the U.S. recovery that aren't backed by huge investments? In his own words, no.

Remember when Warren Buffett was called to testify before the federal government's Financial Crisis Inquiry Commission (FCIC) back in June? And how Buffett refused to come forward voluntarily? And how the feds had to issue a subpoena to get the Berkshire Hathaway chief to show up and provide testimony on the issue of the rating agencies?


What you might also remember is that Buffett said the feds were wasting his time, and he had nothing worthwhile to offer on the subject. And then, when the FCIC began to interrogate him, the Oracle of Omaha kept returning to one singular idea: over and over again, Buffett made the point that even the smartest people in the world can't predict a financial crisis, and that it's a fool's game to even discuss the subject of a financial crisis and why or how it happens.

Perhaps the ol' Oracle was just being humble. But if people as smart as Warren Buffett are useless to investors as market prognosticators, then why do the financial headlines scream with every minor word of confidence that Buffett and the few of his ilk offer on the U.S. economy? If the Oracle of Omaha's opinion is that it's best not to offer any words on when a crash is coming, is it any better to offer words on when recovery is a sure thing?

TheStreet Says: Is it too much to ask for a little consistency from our billionaire prognosticators?

1. What Can Brown Do For You? Annoy You With Its New Marketing Campaign.

Just Do It. I'm Lovin It. The Best a Man Can Get. Be All that You Can Be. It Keeps Going and Going and Going...

A slogan can carry a lot of weight for a brand and a company. Or, in the case of UPS ( UPS), you can abandon one that's established and working well for you in favor of one that leaves consumers thinking, "huh?"

On Monday, UPS unveiled a new slogan that it said would "reflect UPS' passion for delivering transportation and supply chain solutions that can bring competitive power to its customers." The result: I Heart Logistics.

Perhaps you've heard it. Apparently, when the moon hits your eye like a big pizza pie that's ... logistics. Or something.

Why UPS felt the need to convey its passion for logistics is beyond us. Sure, it's probably the kind of buzzword investors like to hear on company conference calls and at the annual shareholders meeting. That said, we're pretty sure most of the company's customers and the general public at large feel no tingling in their loins at the sight of the word logistics. We generally assume a company that ships packages all over the planet has a passion for logistics.

Now ... What Can Brown Do For You? Sure, it lends itself to a poop joke or two, but in what capacity does that slogan not work? You painted your trucks brown, your logo is brown, just about every time anyone heard the word "brown" they thought of you.

Listen, UPS, we get it. You want to reach more business clients. You've expanded your services and made acquisitions. And you think businesses may not be aware of the services you offer. But trying to convince us logistics is sexy? Good luck. Stephen Hawking can make quantum physics cool, but he's the exception to the rule.

TheStreet Says: To quote Jerry Seinfeld, "Who are the ad wizards that came up with this one?" That would be Ogilvy & Mather Worldwide, part of advertising giant WPP.

In light of all this dumbness, we now ask you: Which is this week's dumbest of the dumb stories? Take the poll below to see what TheStreet has to say.

Which is this week's dumbest of the dumb Wall Street Stories

Cell Therapeutics, Have You No Shame?
Starbucks Makes a Grande Gaffe
A High Fructose Corn Syrup By Any Other Name...
Buffett: Everybody Listen to Me. Now Don't.
What Can Brown Do For You? Annoy You With Its New Marketing Campaign.

This article was written by a staff member of TheStreet.

More from Opinion

Chip Stocks May Have Sold Off Too Much On Recent Spate of Bad News

Chip Stocks May Have Sold Off Too Much On Recent Spate of Bad News

Flashback Friday: Tesla Takes a Hit

Flashback Friday: Tesla Takes a Hit

How to Get Out of a Car Lease Early Without Penalty

How to Get Out of a Car Lease Early Without Penalty

Nvidia Slides After Issuing Light Guidance: 5 Key Takeaways

Nvidia Slides After Issuing Light Guidance: 5 Key Takeaways

Walmart Had Strong Earnings, But They Weren't at Amazon's Expense

Walmart Had Strong Earnings, But They Weren't at Amazon's Expense