5. J.C. Penney's Pusher J.C. Penney ( JCP) CEO Ron Johnson once referred to coupons as a "drug" habit that his addicted customers needed to break. Well, judging by his surprise e-mail late last week, Ron seems to be the one who cracked. Johnson sent an e-mail last Thursday to Penney's customers -- the remaining ones that is -- which included a $10 "gift" to thank them for sticking with his struggling department store despite his radical pricing and appearance changes. In case you may have forgotten, J.C. Penney stopped offering coupons back in February in favor of an approach that stresses everyday low prices. The coupon, er, sorry Ron, gift can reportedly be used for an in-store purchase until Nov. 4 and can be applied to purchases of $10 or more. As to why Johnson didn't extend the promotion through the all-important Black Friday weekend, we have no idea. And that's not the only question dogging Johnson's curious coupon campaign...Darn! Forgive us. We called it a coupon again, even though J.C. Penney spokesperson Kate Coultas specifically told the WSJ that "this invitation is in no way a reflection of a departure from our fair and square everyday low prices." Wait Kate! Is it an "invitation," a "gift" or a "drug"? Now we're really confused. And we're apparently not the only ones puzzled by the real meaning behind Johnson's latest ploy. Oppenheimer's analyst said Friday that Johnson's maneuver, however desperate, is not a return to its prior promotional strategy, while Deutsche Bank's analyst put a note out proclaiming, "$10 Off Is A Coupon In Our Book." "With all the changes taking place in our stores, the question I hear most often is: 'What's your vision for jcpenney?'" wrote Johnson in the e-mail. Really Ron? That's the question you hear most often? Wow, the one we hear most is: What on earth is this joker doing to a once-proud American company?
4. Clueless on Clearwire Note to Donna Jaegers and her telecom research team over at D.A. Davidson: Switch to decaf asap. We're not kidding. The Clearwire ( CLWR) coverage by Jeagers was so jittery this week that we're still buzzing from it. Check it out. Before the market opened on Tuesday, Jeagers downgraded Clearwire to neutral from buy -- but maintained her $3 price target -- on the heels of Sprint's ( S) decision to sell a 70% stake to Softbank for $20.1 billion. Since Sprint owns 48% of the wireless data network, Clearwire shares had more than doubled in the three days prior to the deal's announcement, closing at $2.69 on Monday, on the belief that Sprint would use its cash infusion to beef up its control of Clearwire. "With the sharp rise in CLWR's stock price, we think the stock could fall back slightly since Sprint does not need to take any near-term action to increase its holding in CLWR. Our $3 price target is still credible as the low end of a 'fair' price for CLWR, but it could take a year for any further movement on CLWR," wrote Jaegers in her note. Fair enough. Jaegers told her followers to take some money off the table after one heck of a run-up in the stock. One can't fault her there. You don't go broke taking a profit and all that. Furthermore, she correctly stated in her analysis that Sprint will likely let Clearwire "twist in the wind" until it hits a cash crunch in mid-2013 --- a point reiterated in a Bloomberg report Tuesday morning -- so there was no urgency for investors to pile into the stock. At that point, she should have stopped working and put her feet up. Regrettably, the caffeine must have kicked in because soon after she proceeded to put her foot in her mouth instead. Barely two hours from that initial downgrade and with the stock trading down to $2.30 -- right in line with her bearish call -- Jeagers published another note, upgrading the stock to a buy while still maintaining that same $3 price target. "We issued a downgrade of CLWR when we were looking at the closing price of the stock at $2.69 and there was only 12% upside to our target. Now with the stock trading off so quickly, we are reinstating our BUY rating. We expect the stock to be volatile in the near term, but with S in a much stronger financial position with the Softbank investment we think there is more visibility of CLWR either getting funding to stay solvent, or being taken over by S in mid-to-late 2013," wrote Jeager in her second missive of the morning. Wow! She issued a downgrade and then an upgrade in the same morning over a mere 39 cent move in the stock. That may be a world record. Talk about moves like Jagger, with moves like that, Jeagers gave us whiplash! And that's why we suggest that next time Jeagers try a milder cup of java.
3. Microsoft's Pandora Play Microsoft ( MSFT) could have put Pandora ( P) out of its misery with its entrance into the Internet music business. But instead of burying the money-bleeding streaming service, it only nicked it. Hey, what do you expect from the company that brings a Zune to a knife fight? Shares of Pandora sank 3.5% on Monday to $9 after Microsoft announced that its new Xbox Music service will offer free, advertising-supported songs for computer and tablet users. Microsoft said it will charge users $9.99 a month for mobile phone access and the ability to stream live on their Xbox consoles. Shares of Microsoft rose 1% to $29.50 on the news. "The launch of Xbox Music is a milestone in simplifying digital music on every type of device and on a global scale," said Don Mattrick, president of the Interactive Entertainment Business at Microsoft in a press release. Right now there are 30 million tracks on Xbox Music, which Microsoft says is on par with iTunes. Wait a second there Donny boy. You haven't conquered every type of device on the globe yet, just your own Windows-based world. And right now, that's not saying much considering there are far more iPhones and iPads out there than Xboxes. As TheStreet's own Chris Ciaccia points out, if Microsoft really wanted to jump into the streaming business with both feet, "it would have made the service platform agnostic immediately, and charged for an ad-free experience, similar to what Pandora and Spotify do now." Unfortunately, apps for iOS and Android won't be available for a while, so most listeners will be able to play tunes on their Xbox consoles once Windows 8 arrives later this month, but that's about it. No big deal. It's not like anybody listens to music outside their living room, right? Wrong. Clearly Mister Softee is once again trying to play hardball and force users onto their hardware -- and away from Apple's ubiquitous devices. And if there is anything users hate, it's being told what to do. Unless, of course, it's Apple calling the tune. Last month Pandora's stock, which only remains aloft because more than half the shares have been sold short, plummeted 17% on the mere rumor that Apple was launching its own streaming service. Forget Microsoft's mincing. If Apple ever decides to put Pandora in a box, it's going to be a pine one.
2. (More) News Corp. Nonsense Rebekah Brooks may have left News Corp. ( NWSA) in disgrace, but she certainly didn't leave broke. The former head of News Corp.'s U.K. newspaper business was blessed with a payout package worth about $11.3 million after the unit's phone-hacking scandal led to her ouster, according to a Bloomberg report. Apparently Brooks's going-away gift also included legal fees, cash and a chauffeur-driven car, said Bloomberg's source, who preferred to remain nameless since Brooks' payoff was non-public information. Right on Rupert! It's nice to see you rewarding your loyal soldiers for taking bullets -- or cream pies -- for you. Brooks, who left the company in July 2011, will certainly need to muster all the support she can get. She and a host of other over-eager so-called journalists will stand trial next year for the crimes of intercepting the voice mail of celebrities, lawmakers and crime victims, and then conspiring to cover it up. As to whether she will continue to cover up any alleged indiscretions made by her benefactor Rupert, well, that remains to be seen. We imagine that $11.3 million and a personal driver probably go a long way in getting somebody to keep their mouth shut. Moreover, it's a small price to pay considering the company has spent more than $315 million for legal fees, settlements and the elimination of its News of the World tabloid. And speaking of shutting people up -- and out -- Rupert confirmed Tuesday that shareholders rejected a proposal to split the top two roles at the media giant and eliminate the company's dual stock capital structure at the annual shareholder meeting in Los Angeles. Investors mounted the campaign to try and rein in the Murdoch family's power at the company and increase accountability in the aftermath of this embarrassing and costly episode. Oh please. As if these dissident shareholders ever had the slightest chance at taking power from the Murdoch clan. Forget a pie in the face. That whole idea was just a pie in the sky.
1. Pandit's Departure Let's be totally honest Dumbest fans. We too were surprised by Vikram Pandit's abrupt exit on Tuesday, especially since the Citigroup ( C) CEO presided over the bank's market-beating earnings release only the day before. No doubt about it, it was a jaw-dropper even for jaded folks like us who purport to have seen it all. That said, now that the shock has subsided and we've regained clarity, it's obvious that the rapidity of Pandit's dumping was the dumbest thing about it. Only on Wall Street, and to an even greater extent, only at a horrorshow like Citigroup, would Pandit have lasted as long as he did in the top job. Let's just review some of the highlights of Vikram's tenure, shall we? * Since Dec. 11, 2007, the day Pandit was tapped as CEO, Citigroup's stock has tumbled a split-adjusted 89% through Monday's closing price. Citigroup shareholders have paid him a total of $261 million over that same period. * In November 2008, the Treasury Department propped-up Citigroup with a $20 billion emergency infusion, on top of the $25 billion it received the prior month, from the $700 billion TARP fund. The government also backstopped about $300 billion of Citigroup assets, as its share price sank below $5 and some depositors pulled funds from its branches. * Former FDIC Chairman Sheila Bair (from her book Bull By The Horns) on Pandit: "He was a hedge fund manager by occupation and one with a mixed record...he had no experience as a commercial banker... no private investor was likely to invest in Pandit's bank...wouldn't have known how to underwrite a loan if his life depended on it...(Citigroup) bollixed its own attempt to buy Wachovia." * In October 2011, Citi paid the Securities and Exchange Commission $285 million to settle civil fraud charges that it misled buyers of a complex mortgage investment as the housing market was beginning to collapse. * In March 2012, Pandit told analysts that the bank had recovered enough to win permission to raise its quarterly dividend to 10 cents a share from a penny, only to see the Federal Reserve reject his plan after conducting stress tests. * In April 2012, about 55% of Citigroup shareholders rejected Pandit's $15 million 2011 pay package in a non-binding vote. * In September 2012, Citigroup was forced by Perella Weinberg to take a $4.7 billion write-down over the value of its stake in Morgan Stanley-Smith Barney. So let's just add this up. Not only did Citigroup's shareholders view Pandit's performance as awful, but so did the folks at Treasury, FDIC, SEC, Federal Reserve and Citi's competitors on Wall Street. Oh man, even Richard Nixon didn't have an enemies list this long! And now we suppose you can add Citigroup's new chairman Michael O'Neill to it. Even though Vikram said the decision to leave was his own, it was clearly O'Neill who orchestrated the coup that sent Pandit packing and installed the more traditional commercial banker Michael Corbat in his place. In retrospect, we probably should have started the countdown to Pandit's departure in April after O'Neill took the chairman job from that do-nothing Richard Parsons. But perhaps like everybody else, we had grown so accustomed to watching Pandit fail in his attempt to run this Too-Big-To-Fail bank that we never expected this day would come. But it has. To which we say: So long Vikram. We may be the only ones left, but we still hate to see you go. -- Written by Gregg Greenberg in New York.