Shares of RadioShack got smacked Tuesday, losing more than 7% after reports surfaced that at least two highfalutin' private-equity shops are no longer interested in purchasing the low-end consumer electronics seller. Takeover rumors have been circling around RadioShack for months, sending the stock seesawing and creating false hopes for long-suffering investors. Reuters reported on Tuesday that Blackstone Group (BX) and TPG Capital are unlikely to pursue a potential bid for the retailer, citing sources familiar with the matter. Previously, Reuters said that Bain Capital also pulled out of the auction.
(BX) It was also rumored that rival Best Buy (BBY) expressed interest, although we here at The Five Dumbest Lab never understood why it would buy RadioShack other than to put down its mangy old competitor for the same reasons that Travis shot Old Yeller.
Look, we love "The Shack," as the company laughably now wants to be called. That said, we also loved buying albums at Record World and playing Punch-Out in the mall game room many moons ago. Sadly, we don't do those things anymore. Like the private-equity firms -- which most likely would have leveraged the company to death anyway -- we've moved on.
Dumb-o-meter score: 75 -- The Shack needs to get on track, and private-equity debt would only derail it.
For a company that prides itself on serving billions and billions of burgers, McDonald's (Stock Quote: MCD) sure looks silly canceling this week's fruit smoothie promotion due to unprecedented demand.
The frightened fast-food franchiser rolled out the beverages on July 13 and had initially planned a nationwide giveaway to promote the item. Nevertheless, after launching the product, Mickey D's discovered that its restaurant owners would likely run out of smoothie ingredients if the marketing event went as planned.
"The McCafe Real Fruit Smoothies are an absolute hit with our customers, and we're experiencing unprecedented demand for this delicious new choice on our menu," said Neil Golden, chief marketing officer for McDonald's USA, in a statement.
Dumb-o-meter score: 80 -- Who needs smoothies anyway? We want Shamrock Shakes available all year long!
Bless you and your moxie, Carl Icahn. We can always count on you to spice up a slow Dumbest week.
Sure, Icahn is lowering his cost basis on the stock with his lower offer, but what he really wants -- well, aside from sticking it to Lions Gate's current management -- is to launch a proxy battle for control of Lions Gate's board. Icahn has mercilessly and publicly derided Lions Gate's brass for its poor cost-control and its attempt to merge with MGM's film studio.
Lions Gate confirmed Icahn's new cash offer and promised to review it before offering an opinion to shareholders. Of course, we don't expect the company to embrace Icahn's latest bid after it recently enacted a poison-pill defense to dilute his ownership and push the buyout barbarian further beyond its gate.
Dumb-o-meter score: 85 -- Maybe Lions Gate should offer Carl a role on Mad Men. He is undoubtedly one mad man!
In a much anticipated media event, Jobs held court July 16 to finally offer answers and his version of an apology for the new iPhone 4's antenna problems. After admitting that even Apple is "not perfect," Jobs veered from humble to hubristic when he singled out his rivals' smartphones as having the same signal-reception issues as his latest, greatest toy.
"It is disingenuous to suggest that all phones perform equally," Jha told Bloomberg. "In our own testing we have found that Droid X performs much better than iPhone 4 when held by consumers."
Still, like James' theatrics during his jump to Miami, Jobs came off looking small by engaging in a series of fights he didn't need to pick. And Jobs should know better than anybody that a single slam-dunk product is all it takes to jump from worst to first.
Dumb-o-meter score: 90 -- Steve's rant, like Lebron's "decision," was an airball.
The CEO of the nation's second-biggest bank was one of the few major bank heads not to be invited to Wednesday's signing of the U.S. financial reform bill. Dimon was best buddies with the president before he became an outspoken critic of the financial overhaul, which limits Wall Street risk-taking and beefs up consumer protections.
Maybe we should check our copies of Andrew Ross Sorkin's bankus opus Too Big To Fail, but we could swear that Dimon was one of the good guys during the banking collapse, or at least one of the better actors in the dismal drama that unfolded. Dimon didn't need TARP funds, yet he took them at the government's insistence. Similarly, he did Uncle Sam a solid when he bought Bear Stearns when it was in free fall.
Sure, Dimon's Eagle Scout attitude helped boost JPMorgan's performance when his competitors were reeling. Nevertheless, to freeze the guy out now seems ungrateful given the amount of praise heaped on him barely a year ago. And it's hard for us to buy the White House's excuse that there was not enough room in the building for Dimon when the government desperately needed him at a much smaller bargaining table back then.
Who's acting partisan now, Mr. President?
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