The Five Dumbest Things on Wall Street This Week - TheStreet

The Five Dumbest Things on Wall Street This Week

Cablevision's cup of tea; Ryanair lays an Easter egg; Fox is no chicken; Ford, er F, elevates design; Viacom's <I>Trek</I> wreck.
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1. Hot Water in Cablevision

When allegations of corporate wrongdoing arose at

Cablevision

(CVC)

, we at the Five Dumbest Things Research Lab followed the story at a distance.

Or so we thought.

We are as shocked as anyone to report that twice in the past two weeks, someone just outside our Wall Street offices has placed in our hands what could potentially be hard evidence of recently publicized, alleged accounting improprieties at the New York-based operator of cable TV systems and television programming.

Christopher Byron, eat your heart out.

OK, OK. Before we describe this possible evidence -- materials handed over, like in a spy movie, in a dramatically nondescript paper bag -- we owe you some explanation.

Three weeks ago, you may remember, Cablevision said it had uncovered improper accounting in its programming operations. Specifically, the company said certain executives had "inappropriately accelerated the accrual of marketing expenses." Marketing expenses that should have been recognized in 2003, for example, were recognized one year earlier.

Cup Half Full of It
The lab's watching you, AMC

Serious stuff here. The company fired 14 people in its AMC movie division. It hired heavyweight lawyer William McLucas -- the same guy who investigated wrongdoing at

WorldCom

-- to look into the matter. Just last week, the

Securities and Exchange Commission

had launched a formal inquiry.

So imagine our surprise when picking up our morning tea and doughnuts from the snack cart at the corner of Wall and Nassau streets: Not once but twice this month we received our morning beverage in a coffee cup advertising the movie channel AMC.

Hmm, we thought. Advertisement on a coffee cup. Haven't seen much of that since

Microsoft

was hawking its Sidewalk Web sites on the sidewalk.

Hmm hmm. Advertising on coffee cups. A marketing expense. A marketing expense that should be recognized in 2003. A marketing expense that

could

have been recognized in 2002, thanks to inappropriate acceleration.

My gosh! Evidence!

A Cablevision spokesman, however, declined to comment on speculation that the expensing of AMC coffee cups could have been inappropriately accelerated.

Whatever. We're holding on to the cups. And if anyone runs into Bill McLucas, tell him to book the coffee cups in 2003.

2. Fare Play at Ryanair

RealMoney.com's

ace columnist Peter Eavis has been all over

Ryanair's

(RYAAY) - Get Report

case of late. He's been hammering away at the discount Irish airline's capital expenditures, its customer service record and its passenger numbers.

Well, Peter missed something: Ryanair's advertising.

Yes, there we were, spending a quiet July 4 weekend on the computer, perusing the Advertising Standards Authority for Ireland's Web site. And what do we find there? Two different complaints, publicized June 30, alleging misleading information in the upstart airline's advertisements.

In the first complaint, rival

Aer Lingus

argued that a Ryanair ad comparing Ryanair's prices to Aer Lingus' contained "grossly misleading" fares. The ASAI agreed.

But what really amused us was the complaint about ads Ryanair ran in April proclaiming "Easter Specials!" As the ASAI pointed out, a footnote in the ad included the words "Excludes Easter travel." Indeed, the advertised flights didn't start until April 28 -- eight days after Easter Sunday.

Ryanair Lays Easter Egg
Holiday travel must not be completed on holiday

Ryanair argued it had Easter specials anyway, because the tickets were available for sale over Easter Week. The ASAI disagreed with that counter-theory, because the last day travelers could buy the tickets was Monday, April 14 -- six days before Easter. One Monday does not an Easter Week make.

Or maybe it does, over at Ryanair. Tell you what, guys. Take next week off.

Of course, we'll expect you back on Tuesday.

3. Let's Put Hens in Charge of the Fox House

Speaking of complaint-inciting advertisements, we at the research lab can hardly wait for "Banzai," the game show due to debut on your local

Fox

(FOX) - Get Report

television station Sunday night.


That's when we'll get to watch a segment that Fox has used in commercials to promote

Banzai

-- a sequence that has caused untold anguish for at least two chickens in the U.S., and probably for all the other domestic fowl in Fox's audience who fall in the crucial 18-24 demographic.

We're referring, of course, to the infamous clip of

Banzai's

investigation into how many helium balloons are required to levitate a normally flightless chicken.

This clip is so infamous, you understand, that it has already provoked the California utility Pacific Gas and Electric (PCG) - Get Report into taking time out of its busy schedule of wallowing in bankruptcy to issue an alarmist press release warning against any copycat hen-levitating crimes. It seems that at least one such prank has caused at least one such hen to get caught in at least one such PG&E power line. The chicken, we are happy to report, survived the ordeal.

If you must know, the only reason we're writing about this whole episode is so we can include the following note from the

Dow Jones Newswires

dispatch covering the copycat chicken incident: "This updates a story published at 5:48 p.m. EDT (2248 GMT) to add response from Fox and status of chicken."

How often do reporters get to write phrases like "status of chicken"? Not often enough.

4. If You Have to Ask, You Can't Ford It

There's no shortage of reasons to avoid investing in

Ford

(F) - Get Report

. You got your pension liability. You got your 0% financing.

And now, you've got J Mays.

See, on Thursday, Ford announced with big fanfare that Mays had been promoted from vice president, design, to group vice president, design. Which is, apparently, a very big deal for Ford.

Which scares us.

We're sure Mays is a talented visionary and all that. After all, "J Mays' design cues have made our vehicles distinctive and desirable to customers," CEO Bill Ford said in a statement Thursday. "By elevating his position to the level of group vice president, we are emphasizing the importance of product design on our revitalization."

Model J?
Ford gets frilly

But we at the research lab smell the cult of personality here -- a frightening development for a manufacturer too big to afford one. It's all right to build a smaller organization around a single visionary's vision (cf.

Martha Stewart Living Omnimedia

(MSO)

). But as you get bigger, you don't need creative individuals. You need creative bureaucracies. Elevating a single person in this context feels a wee bit desperate -- as if the company is saying that this single person will fix what thousands couldn't.

It takes a village, you see, to design a cool car.

Yet everything about Mays intensifies the cult smell. You got the self-consciously mannered, initialized first name, which carries no period. You got the fact that he apparently was the first American car designer to be the subject of a museum exhibition. An exhibit at the Museum of Contemporary Art in Los Angeles, no less. An exhibit entitled "Retrofuturism," no less.

Retrofuture this, buddy. Time to short Ford.

5. The Activision Thing

Finally, there's little in this world that's both as self-righteous and entertaining as two large companies fighting over money.

In this respect,

Activision

(ATVI) - Get Report

and

Viacom

(VIAB) - Get Report

have not disappointed us.

Activision, the noble protector of the nation's artistic treasure, accuses Viacom of breaching a contract by failing to fully exploit the

Star Trek

franchise. In a statement announcing a lawsuit against Viacom, Activision laments, "Viacom has let the once proud

Star Trek

franchise stagnate and decay."

In response, Viacom Consumer Products announces it's "disappointed" with Activision. "

Star Trek

is perhaps the greatest intellectual property franchise ever to emerge from television," reads Viacom's press release.

We don't know about you, but any time we hear someone talk about exploiting intellectual property franchises, we get a sudden urge to watch

Blind Date

. That's the intellectual property, so to speak, we're rooting to last until The Next Generation.