NEW YORK ( TheStreet) -- The news that Goldman Sachs ( GS) and Russian firm Digital Sky Technologies will seed a $500 million fund that will take a stake in Facebook was considered the dumbest thing on Wall Street this week by readers of TheStreet.
As of late Friday, about 46% of the readers that took our poll thought that Goldman's Facebook investment plan was particularly dumb. First it was reported that Goldman passed on taking a direct stake in the social networking site because its head of private equity thought the investment placed too high a value on the company. Now Goldman is planning on taking in additional investments from wealthy clients while officially being classified as just one investor. Its apparently moving ahead with its decision to set up an investment vehicle with the help of Digital Sky, a Russian Internet conglomerate. Digital Sky is owned by Alisher Usmanov, who is typically portrayed by the Russian media as an "oligarch" whose Internet properties comingle mining and lumber. The Wall Street Journal reports that Goldman will collect an upfront fee of 4% in addition to a 5% share on any investment gains, as well as a possible "private-placement fee" between 2% and 4% for arranging the deal. Given the reported size of the investment of $1.5 billion, the investment could result in a maximum fee of $195 million.
The news that Pepsi's ( PEP) charity funding contest, Pepsi Refresh, was exploited by a shadowy figure from India known as "Mr. Magic" was considered the second dumbest thing on Wall Street with 29% of the votes. According to the New York Times, the Pepsi Refresh contest, which grants up to $250,000 to charitable organizations, has fallen victim to voter fraud. Reports claim that a woman who runs an exotic animal sanctuary in Hawaii discovered that a fellow animal lover beat her out in the contest by employing the services of one "Mr. Magic." This "Mr. Magic" apparently helped stuff the ballot boxes from overseas in violation of the contest rules and received a cut of the winnings in return. Basically, the company outsourced the cheating of a charity contest to a firm in India and now Pepsi is refusing to admit that its contest was corrupted by a vote-bot. Close to 13% of voters found it dumb that a glitch in Apple's ( APPL) iPhone prevented the device's alarm from going off on January 1 and 2. The device malfunction caused distress among iPhone owners around the world. Many users blamed the tech wizards at Apple for somehow being unable to design an alarm clock that works whenever a new year rolls around. Others blamed the iPhone users themselves for seemingly relying on their iPhone for everything.
Almost 8% of voters think that Borders Group ( BGP) struggling over its inability to pay the bills is pretty dumb. At the end of December, Borders said that it may not be able to pay some of its vendors on time as it attempts to negotiate new loan terms. "As part of this potential refinancing, Borders has determined that it is necessary to restructure its vendor financing arrangements and is delaying payments to certain of its vendors," company spokesperson Mary Davis told TheStreet. The Wall Street Journal reported on Monday that Rowman & Littlefield Publishing, one of Borders' major suppliers, temporarily halted the shipment of books to the retailer. The publishing company's CEO told the Journal that it has stopped shipping to Borders until it has more information on its payment plans. Toyota Motor ( TM) being slapped with seven identical lawsuits was considered dumb by 4% of voters. This week, seven insurance companies decided to pile on to the lawsuit bonanza against the auto company. American Hardware Mutual Insurance, Fireman's Fund Insurance, National Surety, American Automobile Insurance, Ameriprise Insurance, Motorists Mutual Insurance and IDS Property Casualty Insurance filed identical lawsuits each seeking a whopping $230,000 for accidents that were allegedly due to acceleration problems with Toyota vehicles. These companies join Allstate ( ALL), which filed a similar lawsuit three months ago seeking $3 million. According to a report from the Wall Street Journal, the U.S. Department of Transportation has been testing Toyotas for more than six months. They've even brought in NASA to help run the tests. The tests have found nothing that would indicate these lawsuits are valid. In fact, it seems the accidents might have been caused by drivers stepping on the wrong pedals. -- Written by Theresa McCabe in Boston. >To contact the writer of this article, click here: Theresa McCabe. >To follow the writer on Twitter, go to @TheresaMcCabe. >To submit a news tip, send an email to: firstname.lastname@example.org.