The Five Dumbest Things on Wall Street: May 11

5. Body Gets Bopped

Talk about a body blow.

Shares of Body Central ( BODY) got floored last Friday, sinking from $29 a share to $15 after the young women's clothing seller disappointed Wall Street with its second quarter and full-year earnings guidance. Prior to its earnings release late Thursday, the stock was a market champion, up 16% year-to-date and fresh off its 52-week high of $30.93.

Seriously, not since Rocky broke Apollo Creed's rib have we seen a crowd favorite suffer such a massive gut-shot.

Here's how it all went down.

The bout, or in this case, the earnings call, started out fairly well for Body Central CEO Allen Weinstein. The company announced in-line results with profit rising 10% and revenue up 12%.

So far so good. Right? Weinstein is in the ring, mixing it up and landing punches.

Unfortunately, things quickly went downhill for the champ from there, just like they did years ago when "Iron" Mike Tyson unexpectedly got stung by James "Buster" Douglas. The retailer announced a seriously negative same-store sales outlook, and then a second-quarter earnings forecast that fell a dime short of analyst expectations.

Finally, when the company offered up a full-year outlook that was 18 cents light of Wall Street's average estimate, it was lights out.

Down goes Weinstein! Down goes Weinstein!

After that knockout punch, the crowd turned on Body Central and boy, did it get ugly. Sellers unloaded the stock in droves, and Wall Street's analyst community, who were almost completely in the company's corner before the call, totally abandoned it.

"We now believe that original expectations of an isolated, quickly fixable merchandise miss in the first quarter may have morphed into an issue that could take several quarters to remedy," said William Blair analyst Sharon Zackfia, as she downgraded the stock to market perform from outperform.

Similarly, Piper Jaffray analyst Jeffrey Klinefelter lowered his rating to neutral from overweight saying the apparel recovery cycle "could present a nearer-term headwind for Fast Fashion retailers."

Wow! Thanks a lot guys for the timely advice. The stock gets absolutely flattened and now you change your opinion?

Heck, let's drop the boxing analogy. These jokers couldn't predict the winner of a professional wrestling match.

4. Facebook Foolishness

What in the name of Elvis Presley is happening on Wall Street? We thought Henry Blodget already left the building!

Facebook isn't expected to go public until next week and already a handful of Wall Street analysts are out touting its stock. Among those jumping the gun by officially initiating coverage on the social networking giant in the past week are Michael Pachter at Wedbush Morgan and Arvind Bhatia over at Sterne Agee.

Both research pieces, to nobody's surprise, were sweet on Mark Zuckerberg's yet-to-be-hatched baby. (By the way, did you see the Facebook CEO sporting a hoodie on the company's road show? Get a suit Zuck! You can afford it.) Pachter rates the stock, which will trade under the ticker FB, at outperform with a $44 one-year price target. Bhatia, on the other hand, one-ups Pachter with a buy rating and a one-year target of $46 and a two-year target of $59.

Come on guys, we know the shares are already trading on the SecondMarket and a few other sundry places where bit-chompers swap paper, but chill out would you? Did you not see what happened when BATS Global Markets tried and failed to go public in March?

We're not saying things will go batty for Facebook as they did for BATS, but things can and do go wrong. So why tempt fate and jeopardize your reputations for the sake of grabbing a few headlines? Do you not remember what happened to Henry Blodget, Jack Grubman and the other glory-seeking analysts during the last tech bubble? Has it been that long?

If not, then maybe you should Google ( GOOG) it. (Just a hint, it didn't turn out well.)

And speaking of Google, it's worth a quick mention that the search giant -- and Facebook nemesis -- had profits of approximately $10 billion on $40 billion in sales in 2011. Facebook, on the other hand, earned around $1 billion on $3.7 billion in revenue last year.

Google, which went public in 2004, currently sports a market cap of $200 billion and has since expanded into things like Android and other people's patents. Meanwhile, Facebook, which is still figuring out its revenue model, is expected to be valued around $100 billion at the high end of its IPO range.

In other words, it took the very savvy guys at Google eight years as a public company to reach its current size, and, according to Bhatia and his buddies, Facebook will get there in about two.

Talk about putting the hoodie before the horse.

3. Hesse Mess

Somebody tell all those teachers up there in the great white north that if they want Sprint Nextel ( S) CEO Dan Hesse gone then they should simply tell him to 'Take off!'

The Ontario Teachers' Pension Plan, which owns a hefty 4% stake in the telecom, announced its intention Tuesday to vote against Hesse's re-election to Sprint's board. Shares of the telecom have tumbled 83% since Hesse became CEO in December 2007 as competitors snapped up market share on his watch.

How horrible has it been for Hesse? So bad that even hitching his wagon to Apple's ( AAPL) shooting star didn't help -- and everybody has been making money off those guys. His grand plan to subsidize iPhones has fizzled and investors are freaked out.

As a response to shareholder gripes, Hesse announced last week he would accept a pay cut to about $3.25 million after forfeiting $346,000 that he's already received for 2012. Nevertheless, the Canadian fund says that's not enough considering the millions of loonies they have lost during Hesse's tenure.

"We view Hesse's reduction in compensation as only partially alleviating our concerns. We therefore do not support his re-election to the board," said the fund on its website.

What a bunch of hosers! What's the difference if Hesse is bounced from Sprint's board if he is still running the company? If they really want Hesse gone, then they should try and oust him as CEO. Maybe take a page from Dan Loeb's Yahoo! ( YHOO) playbook and comb his resume for padding.

Now that's the beauty way to go.

2. Green Mountain Morons

What a pair of drips!

Green Mountain Coffee Roasters ( GMCR) stripped founder and chairman Robert Stiller of his board titles Tuesday after a margin call forced him to unload a boatload of shares during a company-mandated black-out period for insider selling. Joining Stiller in hot water was lead director William Davis, who was also defrocked of his leadership duties.

All-in, the pair, who will still remain on the board, were pressured to puke up 5.55 million Green Mountain shares on May 4 and May 7 to meet margin call requirements in the wake of the stock's nearly 50% shellacking last Thursday over its lowered guidance.

"These forced sales are disappointing and beyond the control of the company. Once the board was notified of this trading activity, it moved quickly to investigate and address this matter," said Green Mountain in a statement.

True, the coffee seller cannot control the idiocy of its individual executives. If these bean heads want to lever themselves up beyond belief, that's their prerogative.

That said, the board does have the authority to kick these morons out of its ranks entirely as opposed to meekly banning them from committee work. Seriously, what kind of precedent does it set for the rest of the company if these guys get wrist slaps for selling during a prohibited period while your average Joe gets canned for the same offense?

Yeah, we said "average Joe"! So we use a lot of puns, what's it to you?

Hmmm. Maybe we need to switch to decaf, but this kind of stupidity just makes us boil.

TIE: 1. Yahoo's Resume Riot

Thank you Yahoo! ( YHOO). Nobody, but nobody, does dumb like you.

On Tuesday, the Internet company's board announced the formation of a "special committee to conduct a thorough review of CEO Scott Thompson's academic credentials." This high-profile commission, which will include both independent directors and a bunch of high-priced attorneys, is the company's response to shareholder activist Dan Loeb's revelation that Yahoo's chief lied on his resume when he listed a bachelor's degree in computer science from Stonehill College, a credential that wasn't offered until four years after he graduated.

Of course, that's not enough for Third Point's Loeb, who says the internal investigation must not be conducted "behind a veil of secrecy". Actually, anything short of Thompson facing a public firing squad would be insufficient to soothe Loeb, whose Pyrrhic proxy war has already claimed the scalps of Yahoo board members Roy Bostock and Jerry Yang.

And speaking of firings, apparently it was decided that Yahoo! director Patti Hart will be the first to take the fall for Thompson's resume fudging. On Tuesday it was reported and later confirmed that Hart, who led the search committee that hired Thompson from PayPal in January, will not seek re-election to Yahoo's board.

We can only imagine that's probably a relief for Hart, whose day job is running International Game Technology ( IGT). Although, who knows, she may miss the fun and games at Yahoo where every day seems like a corporate crap shoot.

And as for Thompson, well, we don't have to imagine how he feels, because he made his emotions quite clear this week in a letter to employees.

"I want you to know how deeply I regret how this issue has affected the company and all of you," wrote Thompson to his troops. "We have all been working very hard to move the company forward and this has had the opposite effect. For that, I take full responsibility, and I want to apologize to you."

As for us, we just can't wait to see what happens when Loeb challenges the real question marks in Thompson's curriculum vitae: His love of travel, rock guitar and Indian food.

Oh man, if he fabricated those things, this battle could really get bloody.

--Written by Gregg Greenberg in New York.

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TIE: 1. Dimon's Dumbness

It was like listening to Darth Vader apologize for embracing the dark side.

JPMorgan Chase ( JPM) Chairman and CEO Jamie Dimon said during the company's April 13 first quarter conference call a series of news articles about massive risk-taking in its Chief Investment Office was a "tempest in a teapot."

Oopsy.

Less than a month later, that same unit just posted a $2 billion loss on existing trading positions as JPMorgan was forced to revise the trading unit's Value at Risk--a measure of risk-taking-- by nearly 100%, raising it from 67 to 129.

Dimon has been the most vociferous, credible critic of proposed tough new rules aimed at reducing risk in the banking system... until Thursday.

In one fell swoop, that credibility went out the window as he admitted a "hedging strategy" executed by the bank was "flawed, complex, poorly reviewed, poorly executed and poorly monitored. The portfolio has proven to be riskier more volatile and less effective as an economic hedge than we thought," he said.

Needless to say the Volcker Rule -- a regulatory dagger aimed at the heart of this type of risk-taking and which Wall Street lobbyists have been striving to delay and water down -- is about to get a lot stronger.

Anyone who had any doubt that giant global securities firms are highly risky and impossible to understand is going to have a difficult time arguing that point for some time to come.

That lesson should have been clear enough during the 2008 crisis, when highly-respected and successful institutions such as Bear Stearns, Lehman Brothers and Merrill Lynch collapsed virtually overnight.

But the "heroes" of the crisis--the JPMorgan and Goldman Sachs ( GS). They enabled defenders of the status quo to make the case that, despite a few--okay, lots--of bad apples, the core was more or less intact.

If any single person could be said to embody that core, it was Jamie Dimon.

But Dimon's credibility--and with it, an entire era of Wall Street risk taking and world domination--just proved more hollow than even its staunchest critics could have imagined.

-- Written by Dan Freed in New York.

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

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