5 Dumbest Things on Wall Street: Dec. 16

5. Diamond Goes Nuts

Say what you want, but in our opinion the recent trading in Diamond Foods ( DMND) has been flat-out nuts.

Hey, if the shell fits!

Shares of Diamond, which makes products such as Emerald Nuts and Pop Secret popcorn, cracked Monday, falling almost 23% after the company delayed the filing of its first-quarter results because of an investigation into the accounting for its walnut payments.

The snack maker's smack-down came a single trading day after its stock jumped more than 50% as a result of a Wall Street analyst's concluded the walnut payment controversy would not force it to restate past results.

San Francisco based-Diamond has said its audit committee expects to complete its examination by the middle of February and it plans to file its quarterly results "as soon as practicable" once the probe ends.

Come on guys! Let's get popping already on that inquiry! P&G ( PG) has been not-so-patiently waiting for a while now to sell its Pringles chip brand to you for a cool $1.5 billion. And they want the whole truth, not just a kernel.

Further clouding the controversy was a report in Monday's Wall Street Journal which debated whether Diamond's payment to walnut growers in September was really an advance for their 2011 crops as the company originally stated.

According to the WSJ, a number of growers said that they never planned to deliver 2011 crops to Diamond and were told by the company that the additional payments were for their 2010 crops.

The story took another turn on Thursday when the Securities and Exchange Commission said it's launching its own probe into the matter. The stock fell another 5.5% to close at $27.84, putting the shares down more than 40% so far in 2011.

Quite honestly, we thought the whole matter was resolved last Friday after a KeyBanc Capital analyst confidently stated that Diamond "has properly accounted for the various payments it made to its growers and (we) expect the investigation to be wrapped up rather quickly." Based on this all-clear signal, we felt more chipper about the situation, and based on the stock's reaction, we weren't the only ones.

Alas, we were wrong. So strap yourselves in folks. It looks like the nuttiness surrounding this stock could last a long, long time.

4. Son of a Buffett

We didn't need 60 Minutes to decide that Warren Buffett's appointment of his son Howard as Berkshire's ( BRK-B) future nonexecutive chairman was silly. In fact, it barely took us a second.

The 81 year-old so-called "Oracle of Omaha" told the CBS news program Sunday that he wants his offspring to have a larger role at the $190 billion company when he eventually retires.

Howard Buffett, a 57 year-old farmer and philanthropist, has served on Berkshire's board since 1993. Warren emphasized that Howard's primary role will be to protect "the culture" of the company because he knows the "values". The elder Buffett also maintained that Howard will not be responsible for day-to-day company operations or picking investments.

Whew! That's a relief. We can't have a director - one of 12 mind you - of one of America's largest investment companies forced to make an investment decision, now can we?

"You worry that somebody will be in charge of Berkshire that uses it as their own sandbox in some way -- that changes the way the decisions are made in reference to the shareholder," Buffett said in the interview. "The odds of that happening are very, very low. Having Howie there adds just one extra layer of protection."

Forgive us Warren, but what values are you protecting by elevating your kid to a more important position at your company? Other than nepotism that is, which would be fine with us if you merely called it that.

Sorry to say but Howard is a college drop-out who sold his Berkshire shares to build a tree house before his divorce (yes, fellow Berkshire board member Bill Gates also left college without a degree, but we'll cut him some slack since he dropped out of Harvard to start Microsoft ( MSFT).) Furthermore, his stint away from the family business as a director at scandal-ridden Archer Daniels Midland ( ADM) does not improve his standing in our eyes too much.

Perhaps the only positive qualification Howard has going for him in our opinion is his age. Right now half of Berkshire's dozen board members are over the age of 79. Not that we have anything against octogenarians, as we most certainly value experience as a major virtue for managers.

But as we saw from the Lehman tragedy, we need board members to be on the pulse of both the company and the economy, not nodding off at shareholder meetings (yeah, we're talking to you Charlie Munger!) If you remember, until 2006, Lehman's board included Dina Merrill, the 83-year-old actress once featured in the old Katharine Hepburn movie Desk Set as well as Caddyshack II and we know what happened there.

Which brings us back to Howard. So what was his reaction when his father promoted him to one of the most important and sought after positions in corporate America?

Howard said it's okay "as long as I can keep farming."

You know what? Compared to Howard, maybe Dina Merrill was qualified to run a company after all. At the very least she could act the part.

3. Best Buy Gets Scrooged

The ghost of Christmas present visited Best Buy ( BBY) this week. And it didn't have many nice things to say about the consumer electronics retailer's future.

Shares of Best Buy short-circuited Tuesday, sinking more than 15%, after the company reported a 29% drop in third-quarter profit as it slashed prices on tablets, TVs and anything else that beeps or buzzes in a last ditch drive to boost holiday sales.

Excluding one-time items, Best Buy's earnings totaled 47 cents per share, missing Wall Street expectations by a full nickel. The Minneapolis-based company also whiffed on the top line with its $12.1 billion revenue total incrementally below the consensus view.

"We took actions to provide value to customers and drive our business in this competitive consumer environment," said CEO Brian Dunn.

Yes, you took actions alright Brian. And they reminded us a lot of the old Crazy Eddie slogan: "Our prices are so low, we're practically giving it all away." Because when you consider the margin deterioration you are suffering, you are pretty close to doing just that.

Of course, we are not accusing Best Buy in any way of playing fast and loose with its accounting like Crazy Eddie Antar did when he was selling stereos in the 70's. He was a flat-out crook. Nevertheless, we all expected more from Best Buy in its third holiday shopping season since Circuit City went bust. Most importantly, we figured Best Buy would have more say over its pricing.

Well, clearly we were wrong about that. Best Buy's pricing is now being set by discounters like Wal-Mart ( WMT) and Target ( TGT) as well as online retailer Amazon ( AMZN). In fact, it's gotten so bad that the chain is now referred to as "Amazon's Showroom."

Yes, the mall is littered with the ghosts of electronics retailers. And if Best Buy doesn't figure out a strategy other than heavy discounting, well, let's just say the company is pretty much scrooged.

2. Stuffed Pantry

That's it! Enough already! Our cupboard is overflowing with excuses from Pantry ( PTRY) and we simply can't accept anymore.

The convenience store operator's stock slumped 11% Tuesday after it posted quarterly results that came up seriously short of analyst estimates. Pantry posted net income of $3.3 million, or 15 cents a share, compared with $8.5 million, or 38 cents a share, last year. Excluding an impairment charge of $8.3 million, earnings were 37 cents per share, which was still way below Wall Street's estimate of 55 cents.

Year-to-date, the stock has shed almost half its value and with each and every leg down, Pantry's management has found yet another fun pretext to explain away the poor performance.

Alright, so what was Pantry's problem this time?

"Cigarette margin, which was down significantly from last year due to competitive pricing pressure, had a 20 basis point impact on our margin," said Chief Financial Officer Mark Bierley on a conference call, adding that Pantry's beverage margins for its Bean Street Coffee offering were also down.

Yeah, those cigarettes can kill you. And not just literally. So what about you, Edwin Holman? We know you are only the interim CEO, but surely you have a reason for your company's disappointing numbers.

"My most immediate focus has been on gaining a better understanding of our declining comparable store sales performance, especially in fueling...," said Holman said in a statement.

Yeah, those gas fluctuations sure can give you indigestion. Holman, if you remember, took charge in late August following the departure of former CEO Terrance Marks, who was hired for the top job at Hooters of America. A few weeks before he took off, however, Marks had his own explanation for Pantry's underwhelming second-quarter performance, blaming a decline in "foot traffic" on a conference call with analysts.

Cigarettes, coffee, Hooters, gas, feet ... anything else holding you back guys? Our cabinet may be stuffed, but maybe we can find some extra space for the rest of your excuses. We can even rent a trailer or a warehouse. You know, whatever it takes.

1. The Gift Of Corzine

Forgive us for smiling so much lately, but Christmas came early here at The Five Dumbest Lab this year. Yep, the bearded guy fell out of the sky and blessed us with the greatest gift of all.

Wait. We're talking about Jon Corzine. Who were you thinking about?

The former MF Global CEO was back on Capitol Hill Tuesday, testifying in front of the Senate Agriculture Committee about what took place in the final days of the doomed brokerage house. His latest appearance comes only a week after he told a similar panel on the House side that he has no idea what happened to the missing $1.2 billion in MF client money. And while he once again pleaded ignorance as to the whereabouts of misplaced cash, Corzine did clear up some of his most intriguing testimony from the prior hearing, the part in which he said he "never intended" to break rules to save the firm.

"I want to be clear -- I never gave any instructions to misuse customer funds, I never intended anyone at MF Global to misuse customer funds," said the former Goldman Sachs ( GS) CEO turned U.S. Senator turned New Jersey Governor turned pariah.

Fine Jon. We believe you didn't order the metaphorical Code Red and steal comingled monies. And we'll grant you that things got hectic in those final days at MF, as they usually do during bank runs. 'Tis the season for charity and goodwill towards men, so please accept our holiday tidings, even in the midst of your own personal tidal wave of misfortune.

All that said, while you may not be a thief, you are still an absolute moron for bringing this entire unseemly episode on, not just on the farmers whose cash you lost, but yourself. In fact, we cannot even recall the last time we saw such a stupid congressional witness and we've been doing this for years.

The auto executives who flew to Washington D.C. in private jets to beg Congress for a bailout -- not as dumb as you. The ratings agencies who gave Triple-A grades to toxic mortgage bonds -- not as dumb as you. The S.E.C. agents who could not explain to Congress how Bernie Madoff eluded them despite repeated warnings -- not as dumb as you.

And so on. And so on.

Here's the difference Jon. You had it all and lost it because of your extreme hubris. None of the witnesses before you had risen as high, and as a result, none of those other losers could fall so low. And while we appreciate the gift of dumbness that you have given us, we would much prefer it if you gave those farmers their money back, even if it means digging into your own deep pockets to do so.

Hey, Christmas miracles do happen you know.

-- Written by Gregg Greenberg in New York..

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

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