5. Spectrum's ShenanigansNot to complain too much Dumbest fans, but we can't remember a time when we've worked this hard to fill our less-than august list. This raging rally in stocks is turning every CEO in sight into a genius, making it an almost a Herculean task even for pros like us to separate the brainless from the bull market. Luckily, however, we can always count on our good friends at Spectrum Pharmaceuticals ( SPPI) to provide us with some low hanging fruit. Let's start with CEO Raj Shrotriya's paycheck, because that piece of corporate idiocy was the easiest to unearth. As disclosed in the 10-Q Spectrum released last Thursday -- after the bell and the company's conference call mind you -- Shrotriya pocketed $10.1 million dollars in 2012 for his services. Pretty killer comp, huh, even if it was down from the gobsmacking $25.2 million Raj took home 2011. And what makes it even more impressive is the fact that shares of Spectrum sank 22.5% last year.
Eat your heart out A-Rod. When it comes to getting overpaid for lack of performance, you've been outslugged. So, what exactly did Raj do to earn all that dough if the stock's performance was that unbelievably sad? Well, according to the company's compensation committee, Raj earned every penny because he met all the targets laid out for him. For example, under his leadership the company grew revenue 39% from $193 million to $268 million. In order to meet that goal, however, it's now become abundantly clear that he stuffed the company's colon cancer drug Fusilev down the throats of every single customer he could. Seriously, if there was ever any doubt as to why the company issued a massive warning about Fusilev sales on March 12th -- just three weeks after Shrotriya told analysts that Fusilev sales would grow this year -- well, now we know the truth. Nobody had any room left on their shelves for the stuff! In case you may have forgotten, Spectrum revealed in March that first quarter revenue fell 35% to $38.7 million compared to last year. Fusilev sales totaled $11.8 million in the first quarter, down sharply from $51 million in the prior year. We also now know that the SEC is interested in Spectrum's Fusilev shenanigans as well. Tucked into Thursday's SEC filing was a disclosure that the regulator is investigating the "change in ordering patterns of Fusilev" that forced Spectrum to drastically cut its 2013 sales forecast to between $80 million and $90 million. Not that the analysts on the company's conference call could have possibly inquired about the investigation. Raj cleverly scheduled the call for 1:30 p.m. last Thursday, while the 10Q was released after the closing bell. Very sneaky, Shrotriya! Very sneaky indeed! That said, discerning listeners might have been able to pick up that something was amiss because Raj kept avoiding all questions pertaining to Fusilev. Whenever an analyst tried to get Raj to say something about the drug's sales, he redirected the query to one of his trusted advisers. At one point Raj curiously responded to a question about the drug's inventory by stating, "We can't comment on FUSILEV." Sorry, big guy, now that the Feds are on the case, you're going to have to start talking. And when you do, we'll be right here, hanging on your every word. What else can we do? There's a bull market going on and we need all the dumb stuff we can find!
4. Phony SonyWhat on earth happened to Dan Loeb? Did alien invaders swoop down and body-snatch the hedge fund manager? Seriously, just when Sony ( SNE) shareholders need his Godzilla act the most, Loeb starts bowing his way through Tokyo boardrooms like a goodie goodie! Loeb, who demonstrated the power to demolish a CEO with the stroke of his pen last year at Yahoo! ( YHOO), set his sights on struggling Sony this week. Loeb wants to restructure the once-iconic Japanese conglomerate by spinning off 15% to 20% of its entertainment division in an IPO, which he would then backstop with $1.5 billion to $2 billion of Third Point's money. Loeb reportedly owns 64 million Sony shares, or approximately 6.5% of the company. Shares of Sony popped 10% Tuesday on Loeb's play to unlock value at the PlayStation-maker. "So while Third Point supports your agenda for change, we also believe that to succeed, Sony must focus," Loeb told Sony CEO Kazuo Hirai in an overly polite letter published in Tuesday's New York Times. Loeb also travelled to Tokyo this week to exchange pleasantries with Japanese officials and Sony executives.
Good lord, Loeb! Talk about namby pamby! That's not the Dan Loeb who strikes fear into the hearts of CEOs with padded resumes, or the one who gave his nemesis Bill Ackman an Herbalife ( HLF) wedgie for the spite of it. Somebody, anybody please bring back the fire-breathing hedge fund manager that corporate boards used to know and loathe! This fake Dan Loeb is killing us with his charm offensive! More than that, it's also not doing him any good with the brass at Sony, who rejected his overtures with typical Japanese courteousness. "As President and CEO Kazuo Hirai has said repeatedly, the entertainment businesses are important contributors to Sony's growth and are not for sale," Sony said. "We look forward to continuing constructive dialogue with our shareholders as we pursue our strategy." Look, Dan. As you pointed out in your sickeningly sweet letter, Prime Minister Shinzo Abe is turning Japan upside down. While many others have failed, Abe has been able to smash the yen into submission and he intends to keep smashing. Moribund Japanese companies are finally getting competitive again and their stocks are flying. So if it's a brand new day in the land of the rising sun, why not take your usual take-no-prisoners approach and apply it to Sony? Forget all that stuff you heard about Japanese corporate civility. They don't need any more civility. They need hostility, and nobody does that better than you. Sony has never been able to enjoy the synergies from owning both electronics and entertainment, so it's a perfect candidate to be broken up. And you are just the corporate monster to stomp up and down until it cracks into two profitable parts. Or at least you were before some imposter stole your identity.
3. Dell DepressesSad to say, but this Dell ( DELL) deal has officially devolved from dumb to depressing. The pitiful PC-maker, now locked in a war between billionaire Carl Icahn and founder Michael Dell, announced Tuesday it was reporting its fiscal first-quarter results five days ahead of schedule on Thursday May 16. And if that unexpected bit of weirdness wasn't enough, the WSJ officially leaked -- yeah, we don't get that either -- that Dell was going to post earnings of 20 cents a share for the period, a full 15 cents shy of Wall Street analyst expectations. Miraculously, that's exactly what happened! The sad sack of a company stepped up to the plate and called its own very sorry shot. Well, they actually delivered 21 cents on Thursday afternoon, so they beat their own crappy estimate. Way to nail it guys! Of course, Dell's brass didn't the mind the company's big miss. In fact, every time Dell whiffs they feel that much more vindicated that their $13.65 a share bid to privatize the company is the correct move and maybe even too high a price.
Candidly speaking, the schadenfreude involved here has become quite saddening indeed. It's like these guys are cheering for Charlie Brown to miss the football simply to prove their point. Well guys, congratulations. You win. Your team sucks. Still, we were reminded this week that while Dell remains a loser, it is not unloved. Icahn and Dell shareholder Southeastern Asset Management have actually become more and more enamored with each passing week. Or less and less. To be honest, we're not sure based on their offers. You see, last week the pair said they want to keep Dell publicly traded and give shareholders $12 in cash for their troubles. Back in March, Icahn announced his plan to pay a special dividend of $9 per share if shareholders reject Michael Dell's buyout. After that idea received a lukewarm welcome, Carl offered to buy 58% of Dell stock for $15 per share. Yes, it's pretty confusing. And not just to us. Dell's board asked for specifics in a letter Monday. They want more information on financing, management ideas and strategy from Carl and his cohorts. That's a farce too. Carl and company have no plan to run Dell. They just want a higher price for a company that once changed the face of computer manufacturing. As for us, we just want to change the channel. This whole stupid saga is bringing us down.
2. Wal-Mart's WorldOnce again Wal-Mart ( WMT) has proven that it's a world unto itself. The planet's largest retailer said no to signing a Bangladesh fire and building safety accord this week because it believes it can provide better and faster safety checks by itself. The legally binding agreement was drafted by European labor and non-governmental organizations IndustriALL and UNI Global Union. The plan is meant to prevent tragedies like the building collapse in Bangladesh that killed more than 1,100 garment workers last month. "While we agree with much of the proposal, the IndustriALL plan also introduces requirements, including governance and dispute resolution mechanisms, on supply chain matters that are appropriately left to retailers, suppliers and government, and are unnecessary to achieve fire and safety goals," said Wal-Mart.
We can see the New York Post headline now: Bentonville to Bangladesh: Drop Dead. OK. Maybe it's not as malicious as that. Wal-Mart did say it would conduct in-depth safety inspections at all 279 Bangladesh factories with which it works and publicly release the inspection information. It also promised to provide fire safety training for every worker in every factory in Bangladesh that produces its goods. And for the record, the company has stepped up its safety inspections since 110 people were killed in a November 2012 fire in a Bangladesh factory that was making goods for Wal-Mart and other retailers. Still, without Wal-Mart on board, any attempt at a comprehensive plan is doomed to fail in the same way the League of Nations failed after World War I. The powerful U.S. did not sign up for that body and it quickly turned toothless. A number of other North American retailers including JC Penney ( JCP) and Sears ( SHLD) are already following Wal-Mart's lead and drafting their own supplier safety solutions. Trust you us, the creation of all these competitive plans will ensure that none of them will pan out. And while we understand that the safety of their suppliers' factories is not directly under their purview and more of a governmental problem, the world's retailers could have come together and done something really wonderful to solve this problem this week. Alas, that won't be the case and we can instead count the days till the next tragic incident. "Transparency is vital to make progress in improving factory conditions, and by disclosing this information, government, workers, non-governmental agencies, and companies can benefit from this work," Rajan Kamalanathan, Wal-Mart's vice president of ethical sourcing, said in a statement. True, Rajan. Transparency is important, but so is solidarity. Too bad you'll never know it.
1. Bloomberg's BonerWall Street traders rose up in anger this week after discovering that their trust was violated and their private conversations monitored for the illicit gains of others. Now ain't that a switch. Yes, as you probably discerned, we're talking about the Bloomberg scandal in which the news service was busted for tracking traders movements. And while it undoubtedly won't prove terminal for the terminal-purveyor -- where else will traders go for the latest Las Vegas sports gambling lines? -- it will cause them a few headaches and a lot of mea culpas, at least until the Street clears out to the Hamptons for Memorial Day weekend. Bloomberg News editor-in-chief Matthew Winkler kicked off his apology parade on Monday with a column saying, "Our reporters should not have access to any data considered proprietary. I am sorry they did. The error is inexcusable."
Excuse us, Matt, but where's the "Grovel" key on the machine? When we type "GRVL" into our terminal it keeps telling us that the function does not exist? Winkler's confession also wasn't heard clearly enough across the pond. The Bank of England called Bloomberg's actions "reprehensible" and said it would be "liaising with other central banks on this matter." Or, in other words, the Federal Reserve, Treasury, IRS and a few other U.S. government departments will probably have to take some time off from spying on the AP and the Tea Party to chat with the Brits about the perils of being spied on. Come to think of it, they may also want to check in with the investment bank that brought this whole snooping story to light through the New York Post, Goldman Sachs ( GS). Goldman is a major user of Bloomberg's service, about $20k per terminal, and any disruption in their business would be a major blow to the non-public company's bottom line. Goldman would also be a great source to tap because they know better than anybody how confidential information flows. Straight from their investment bankers to their trading desks of course! Or is it from their board members to Raj Rajaratnam? Or is it from their bond salesmen to John Paulson? Sorry, it's hard to remember all Goldman's privacy lapses in a single sitting. Now excuse us while we hit the Bloomberg machine for the updated odds on the NBA playoffs. -- Written by Gregg Greenberg in New York. Follow @5gsonthestreet