The 5 Dumbest Things on Wall Street This Week: July 12

5. Disney's Dumbness

Hi-Yo Disney ( DIS)! John Carter rides again.

The media giant shot itself in the foot last weekend after its supposed summer blockbuster-slash-tent-pole release The Lone Ranger went over like a cloud of dust. Despicable Me 2 ran roughshod over Disney's masked man (not to mention Johnny Depp's Tonto) at the box office with Universal's offering earning $82.5 million in the U.S. and Canada, compared to a pathetic $29.4 million for The Lone Ranger.

Disney's Western reportedly cost the company $225 million to produce plus at least $100 million to market, nearly guaranteeing that the company will take a severe loss on the widely panned film. The film's shameful showing puts it on par with last year's $250 million flop John Carter, which opened to a measly gate of $30.1 million and caused Disney to swallow a $200 million write down on the stupid sci-fi flick.

Carter, if you remember, got his ass kicked by The Lorax in its opening weekend, thus making this the second time Universal dominated Disney at its own animated game.

"Obviously this is disappointing," said Dave Hollis, vice president of distribution for Walt Disney Studios. "It obviously didn't connect with audiences, and it's frustrating for us. We felt we had everything in place for it to succeed."

Don't feed us that drivel Dave. There was nothing in place for this movie to succeed and you know it. This movie has been plagued for years, so much so that you were forced to shut it down because it blew through its already bloated budget. It was as clear then as it is now that the movie should never have been brought back from the dead and those costs should have stayed sunk.

Heck, we still don't know what on earth prompted you to bring back the gun-toting character from 1950's TV in the first place!

If today's kids didn't connect with the Wild, Wild West and Cowboys & Aliens -- both massive, money-losing busts -- then why would you ever believe this far more antiquated Western starring a guy named Armie Hammer would do the trick?

More importantly, how did you think this was going to play in foreign markets, where the real money is these days? Were you counting on all those Chinese teens to ask their grandfathers for their Clayton Moore memorabilia so they can wear masks to the Shanghai multiplex?

Yeah, yeah, we know that The Lone Ranger was a Jerry Bruckheimer/Gore Verbinski production, the same team responsible for the Pirates of the Caribbean franchise. And we also know Disney made money scissor-hand over scissor-fist with Johnny Depp playing Captain Jack Sparrow in that highly profitable series of films.

Still, we have a little advice for Disney before it once again bets the Mouse House on less than a sure thing.

Next time put the movie before the theme park ride.

4. Tesla's Pit Stop

Come on index-makers. Enough with the baby steps. Let's just stick Tesla ( TSLA) in the Dow Jones Industrial Average.

Hey, we're not fooling! With a $14 billion market cap, 3,000 employees and public since July 2010, it undoubtedly belongs there. Don't you think?

Excuse our dripping sarcasm, but 1.) its blisteringly hot on Wall Street, and 2.) we still can't get over the inanities occurring in the all-important indices this week, most notably the electric car-maker zooming into the Nasdaq 100. Tesla was tapped to take Oracle's ( ORCL) spot Monday as the software-maker -- $146 billion cap, 120,000 workers, IPO in 1986 -- heads over to the New York Stock Exchange ( NYX).

Oracle, in case you were unaware, is not a member of the widely watched Dow Jones Index despite its size and influence. For that matter, tech-bellwether Apple ( AAPL) -- $385 billion, 73,000, trading since 1980 -- is also excluded from the august 30-member group (although it would probably have to split a few times if it was accepted into the Dow since $420 a share would blow the lid off the price-weighted index.)

Of course, size and stature have little meaning when it comes to the Dow since Alcoa ( AA) -- $8.4 billion, 61,000, 1978 -- remains on the team. The aluminum maker, which is far smaller than all three tech companies, "unofficially" kicked off earnings season Monday by beating Wall Street analyst estimates by a penny.

But back to Tesla, because the money-losing carmaker and its single product really should be everybody's focus now. Forget Bernanke, this is a Musk-see market.

That Musk, as the world knows by now, is Elon Musk, the billionaire entrepreneur who took Tesla public three years ago this month at $17 per share. The company's stock traded in line with the major equity indices -- the Dow 30, S&P 500 and Nasdaq -- until the start of this year when it pulled away from the rest of the pack.

Forgive us. Not just pulled, blasted off like one of Musk's SpaceX rockets. Tesla's stock is up 265% so far this year and trades at an all-time high of $123 (well, a three-year high).

Tesla bulls argue that the outperformance, the nose-bleed valuation and the spot in the index are warranted since the company's sales surged 1,760% in the past year to just under $1 billion. (Alcoa posted sales of $23.5 billion in the past year, but we're not talking about them.) The company's fans also say its SUV, which will arrive in the second half of 2014 (yes, 2014) will add on to the gains of its current offering (note the singular), the Model S sedan.

Our view, however, is that a third of Tesla's float has been sold short as of June 14th and this price is blatantly unnatural.

Not that Tesla's car is not fabulous. We keep hearing that it is an amazing roadster to own if you have the $70,000 to own it. Nevertheless, the company's stock price is not trading on fundamentals. It is trading on the backs of some very bloody bears and to talk about the company as a legitimate addition to any index is plain silly.

Almost as silly as Alcoa still being a Dow component while Google ( GOOG) -- $300 billion, 54,000, 2004 -- remains on the outside looking in.

3. World of Hurt

We beg of you Dumbest readers, please take pity on the poor workers over at World Acceptance ( WRLD). While all the other subprime lenders are enjoying their summer vacations, these sad schnooks are stuck in the office finishing up their long overdue homework.

World Acceptance announced after last Wednesday's shortened July 3 session -- right when Wall Streeters were jumping on the next Hamptons Jitney, mind you -- that it was unable to complete its latest annual report for the fiscal year ended March 31. The problem it said was because the company could not get a handle on its allowance for loan losses.

World Acceptance did say that it plans to complete all the necessary filings by the end of July. Nevertheless, that did not stop traders (most likely from the third hole at Shinnecock, Maidstone or Atlantic) from dumping their shares of the company on Friday, sending it down 12%.

Or perhaps they were shorting the stock, although with 38% of the float sold short at last check, we would have to think that finding additional shares to sell was probably tougher than getting a reservation at the Palm in East Hampton last Saturday night.

And we can only imagine those short-sellers shopping in Sag Harbor were even more sanguine when World admitted in its SEC filing that "it is possible that the Company's amended Form 10-K will report a material weakness in its internal control over financial reporting relating to its process for determining its allowance for loan losses."

On Tuesday July 9th, World revealed that it received a notification letter from the Nasdaq that it better get up to date on its filings by September 3 or else face delisting. That said, delisting is a long shot since the exchange can grant the company an extension of up to 180 calendar days from the Form 10-K's due date if it approves its plan to regain compliance.

Whether the company's current shareholders will be able to hold out that long is another story.

2. Bill's Guessing Game

Step right up folks! It's time to play Wall Street's latest craze "Guess What Bill Ackman's Buying."

Wait a second. Upon further thought, please don't. The game is way too dumb even for experts like us.

Rumors that the Pershing Square hedge fund manager was taking a position in FedEx ( FDX) sent shares of the delivery giant up over 4% Tuesday to $103. The stir got started when Reuters reported that Ackman was asking institutional investors to commit $1 billion to two new funds by the end of next week with the sole purpose of diving into an unnamed business that is "simple, predictable, and free-cash-flow-generative and enjoys high barriers to entry."

"We are launching two new co-investment funds PS V, L.P. and PS V International," Ackman wrote in a July 8 letter seen by Reuters. "Because of confidentiality considerations, it is not prudent for us to share the target company name with all of our 500+ investors."

Hmmm. Tell us Bill. Is it bigger than a breadbox? Can we buy a vowel? we have to answer in the form of a question?

Yeah, the whole thing sure does make one wonder why all those Wall Street heavy hitters spent all that time and money getting their Ivy-league M.B.A.s when their investment strategy is simply to speculate on Bill's next big bet.

And yes, Bill certainly makes big, big bets, so it is not hard to understand why folks would want to take a shot at front-running him. Not all of them work out of course -- see the debacles at Target ( TGT) and J.C. Penney ( JCP). But when Ackman goes in, he goes all-in and judging from Pershing Square's lifetime annualized return of more than 20% after fees, it's hard to argue with his success. (And judging from that recent Vanity Fair profile of the highly competitive Ackman, it seems best not to argue with him at all.)

And despite what his Herbalife ( HLF) nemesis Carl Icahn may think, Ackman does not make his billion dollar wagers willy-nilly. Trust us, we've seen his slide shows. They're longer and more draining than your average Robert Altman movie.

If Ackman's target is indeed FedEx, the other thing we learned on Tuesday is that the company does indeed have the "high barriers to entry" Bill desires. The company agreed to settle a lawsuit over claims it was "systematically overcharging" clients by billing for deliveries to businesses and government offices at higher residential rates, according to a filing in federal court in Memphis, Tenn.

Take it from us. Not everybody can rip off their customers like that. It takes a wide moat around your business and that's exactly what Fedex and UPS ( UPS) enjoy when it comes to overnight shipping.

Although there is one other option...Hold on! Is Ackman planning to buy the U.S. Postal Service?

Oh Lord! Forget game show. That would be a reality show.

Especially if he hires ex-JC Penney CEO Ron Johnson to star in it.

1. Lew's Lulu

The boys at the Delta House have already demolished Faber College and now Jacob "Dean Wormer" Lew is putting them on double secret probation.

Talk about better never than late.

The Financial Stability Oversight Council pronounced American International Group ( AIG) and GE Capital ( GE) as "systemically important" non-bank firms Tuesday. The designation means that the two companies are so humongous that their failure could once again threaten the entire financial system. As a result, both companies will now be forced to meet capital requirements and be regulated by the Federal Reserve.

Last thing first. Under these new rules, Ben Bernanke, or should we say the next Ben Bernanke, will not merely be responsible for getting the unemployment rate below 6.5%, keeping inflation in check and running a $3.5 trillion balance sheet, but he or she will now be supervising "Too Big to Fail" banks and non-banks as well.

Boy, is there anything this unelected branch of government can't do? (Or perhaps we should be asking the reverse, is there anything our elected lawmakers actually do?)

First thing next. The horses are out of a barn that burned down five years ago and now these numbskulls are proudly protecting the American public from AIG and GE. A little freaking late guys don't you think?

What's next on your to-do list, busting Bernie Madoff? Oh, that's right, you didn't even catch him. He gave himself up.

Shares of the so-called risky companies barely budged in reaction to their new categorization Wednesday. The reason why Wall Street didn't even blink is because it knows full well that Dodd-Frank, which all this jabberwocky falls under, is as toothless as Sarbanes-Oxley.

(Sarbanes-Oxley toothless? Next time you see Jon Corzine smiling on the street, you tell us.)

"These designations will help protect the financial system and broader economy from the types of risks that contributed to the financial crisis," said Treasury Secretary Jacob Lew. Lew also heads the council that sprung from the 2010 Dodd-Frank financial reform law.

Hit the road Jack. We know you are trying to prevent AIG and GE from becoming the next, well, AIG and GE, but the whole thing is flat-out farcical.

If these non-banks are so risky and the threat is apparent, then break the damn things up already. Sorry to say, but designating these firms "systematically important" does not give the American public a lick of confidence that you and your committee will prevent the next catastrophe. The government couldn't see or stem the collapse before, so there is no expectation it can or will do it the next time.

You want more proof that the whole thing is ex post facto absurdity? Check out AIG's reply to the announcement.

"AIG did not contest this designation and welcomes it," the company said in a statement on Tuesday.

Think about it.

The government says AIG is "Too Big to Fail" and a systemic risk.

AIG essentially says "That's cool. You saved us last time and you'll do it again."

To which we say, "The toothpaste is out of the tube, so why are these schmucks smiling?"

-- 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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