Professional Documents
Culture Documents
Investor Uprising - The Biggest, Boldest Business Blunders of The Year
Investor Uprising - The Biggest, Boldest Business Blunders of The Year
MOBILE
HOME | GLOBAL MACRO | MEDIA | TECHNOLOGY | BIOTECH | COMMODITIES | EDUCATION | IU25 INDEX | ABOUT US
Sherri Cruz
There was no shortage of business blunders in 2011. In fact, there were so many egregious incidents that it was difficult to decide which rated worse than another did. For example, MF Global initially seemed to be a serious contender for the No. 1 spot, just because of the tremendous amount of money missing from customer accounts.
But Olympus hid $1.7 billion in losses, News Corp. hacked phones to get information about people, Groupon essentially lied about how much revenue it made, and Sony's security breaches, which might have been prevented with better security measures, affected 70 million users. So faced with overwhelming amounts of bad judgment, lack of oversight, questionable ethics, and simple stupidity, I did the only logical thing. I decided to put this Top 10 list in alphabetical order. Bank of America Corp. (NYSE: BAC) As if most banks hadn't done enough to get under the skin of their customers, Charlotte, N.C.-based Bank of America's September announcement that it planned to charge customers $5 a month to use debit cards led to outrage by consumer groups and customers. (See: Bank of America 'Sticking It' to Customers.) Many expected other banks would follow suit, but that didn't happen. Instead, competing banks, which use less conspicuous methods of earning additional revenue, went after Bank of America customers. The fallout led Bank of America to abandon the dubious debit card fee plan -- but not without damage to its reputation. Groupon Inc. (Nasdaq: GRPN) Groupon, as IU contributor Michael Shmarak wrote, was the poster child for what not to do during an SEC quiet period; whether it's the company's CEO drafting a memo for the world to see, its chairman talking about the company at an awards dinner, or random employees posting information on social media networks, no one seems to get the hint that the rules about quiet periods are there for particular reasons. Then there was the whole issue of misstating its revenue. Months prior to the coupon company's $700 million initial public offering in November, Chicago-based Groupon revealed it miscalculated its revenue, raising doubts about the sustainability of its business model. After discussions with the Securities and Exchange Commission, the company restated its 2010 revenue, cutting it by more than half from $713 million to $313 million. Before the restated revenue, Groupon had been counting the full amount of its online coupon sales as revenue when it didn't actually earn the full amount. A portion of the sale -a commission -- went to the business owner that provided the goods or services. Groupon's IPO was priced at $20. It's now trading for about $22. Hewlett-Packard Co. (NYSE: HPQ) The Palo Alto, Calif.-based company launched its TouchPad tablet in June, but after poor sales, former Chief Executive Leo Apotheker said Hewlett-Packard was exiting the tablet and PC business altogether and to focus on corporate software. The company fired Apotheker and gave
IU Education
Resources to help you become a better investor
business altogether and to focus on corporate software. The company fired Apotheker and gave him $25 million in severance.
Quick Poll
If you had the option to direct the entire amount you pay in income taxes to an IRS-recognized charity devoted to education, healthcare, social welfare, or the environment instead, would you?
Yes, eagerly. I would pay the equivalent of 50% or more of my income tax to a charity. I would pay the equivalent of up to 50% of my income tax to a charity.
Then it hired former eBay chief executive and failed California gubernatorial candidate Meg Whitman, who said the company wouldn't be getting out of the tablet or the PC business after all. But critics say Hewlett-Packard's products are inferior to competitors, including its tablet. Moreover, the company appears to have a revolving chief executive problem, with several CEOs spanning a few years, and each one receiving large severance packages. Before Apotheker, Mark Hurd received $12 million plus in severance, leaving after claims of sexual harassment. Before Hurd, Carly Fiorina was forced to resign in 2005, leaving with $21 million in severance.
EMAIL THIS PRINT COMMENT PAGE 1 / 3 NEXT >
No, I trust the government completely to spend my tax dollars wisely. Other. Tell us on the message boards. Submit
POLL ARCHIVE
follow us
InvestUprising Our Portfolios' Sorry States of Affairs http://t.co/IcnFx6Ap RIConferences Our Portfolios' Sorry States of Affairs > @InvestUprising http://t.co/7V3j7bnD writenoreen "Our Portfolios' Sorry States of Affairs" http://t.co/paY674O2 #iuprising RIConferences So What if the Internet Goes Dark? > @InvestUprising http://t.co/FBjWgE3b InvestUprising So What if the Internet Goes Dark? http://t.co/1HbPzXWd
"I AM saying goodbye to Japan as a businessmannot as a human being. I will be back, many times, I know." With that, Michael Woodford told the Japanese media on January 6th that he is giving up plans to wage a proxy battle to oust the existing board of directors of Olympus in favour of a new lot that would have included him as president.
REPLY POST MESSAGE MESSAGES LIST START A BOARD
Yes it does sound harsh. But you made me chuckle, thinking of all our fallen "leaders" getting the treatment they deserve.
USER RANK IRON REPLY POST MESSAGE MESSAGES LIST START A BOARD
Like Us on Facebook
Investor Uprising on Facebook
Maybe there needs to be stiffer penalties. Give someone life in prison or like in other countries like Iran where you lose an arm. I know sounds harsh, but we need a frieghten those steal and cheat. Current punishments are not suitsble.
REPLY POST MESSAGE MESSAGES LIST START A BOARD
Bill
Joshua
Mike
Wendy
Bio
Re: Blunders Noreen Seebacher 12/31/2011 12:22:13 PM It's frightening to think of all the possible repercussions, isn't it @impactnow?
USER RANK BLOGGER REPLY POST MESSAGE MESSAGES LIST START A BOARD
BLOGGER
Unfortunately we may be seeing the repercussion the meltdown for decades to come much like Chernobylit's truly a shame that Nuclear power has not evolved or that legislation has not been enacted to prevent these issues from occurring again and again.
REPLY POST MESSAGE MESSAGES LIST START A BOARD
Re: Blunders philtheinvestor 12/29/2011 7:38:08 PM HA. Hopefully he's learned from his mistakes... or at least getting caught.
USER RANK IRON REPLY POST MESSAGE MESSAGES LIST START A BOARD
Re: The Norm Noreen Seebacher 12/28/2011 6:40:44 PM That is a wonderfully descriptive analogy, @Broadway.
USER RANK BLOGGER REPLY POST MESSAGE MESSAGES LIST START A BOARD
Fraudsters are like cockroaches or mice. Usually they're sly enough to avoid your sight. But if you start catching one or two in broad daylight ... Loook out! That usually means they're getting brave because there are so many of them hiding in the dark.
REPLY POST MESSAGE MESSAGES LIST START A BOARD
Investor Uprising 25 Agrium, Inc. America Movil S.A.B. de C.V. ADS Apple, Inc. Atwood Oceanics, Inc.
1045.17 +10.88 (+1.05%) 83.79 24.73 585.78 38.18 34.66 65.93 48.81 59.93 42.50 13.16 14.47 50.21 4.84 28.04 24.21 29.84 50.85 14.24 673.50 56.77 36.83 27.93 28.58 33.26 31.62 +1.62 (+1.97%) +0.62 (+2.57%) +11.65 (+2.03%) -0.76 (-1.95%) +0.38 (+1.11%) -0.23 (-0.35%) -0.17 (-0.35%) -0.57 (-0.94%) +0.23 (+0.54%) +0.30 (+2.33%) +0.52 (+3.73%) -0.08 (-0.16%) +0.01 (+0.21%) -0.17 (-0.60%) -0.66 (-2.65%) -0.18 (-0.60%) +0.57 (+1.13%) +0.13 (+0.92%) +14.09 (+2.14%) +0.27 (+0.48%) -0.02 (-0.05%) +0.55 (+2.01%) +0.18 (+0.63%) -0.02 (-0.06%) +0.61 (+1.97%)
@Phoenix, there will ALWAYS be a next year where fraud is concerned, and stupidity too! It's the intersection of the two that is either pretty scary or strangely comforting, depending on your viewpoint. And that's just investing...I think the same dynamic is true for terrorist plots, too, come to think of it! You captured nicely every investor's nagging fear that where there's smoke, there's fire. That's one of the MANY reasons why I enjoy IU and these message boards so much. The criminals have the chutzpah, but we have each other and our senses of outrage and humor. Bring it on, 2012...we're ready!
REPLY POST MESSAGE MESSAGES LIST START A BOARD
Broadcom Corp Celgene Corp Cliffs Natural Resources Cognizant Technology Solutions
Re: Blunders Noreen Seebacher 12/28/2011 8:30:52 AM Second. But hide your daughters first. Heck, hide yourself.
USER RANK BLOGGER REPLY POST MESSAGE MESSAGES LIST START A BOARD
Dolby Laboratories Inc. Cl A Eldorado Gold Corp. First Solar, Inc. Gilead Sciences, Inc. GT Advanced Tech
The blogs and comments posted on Investor Uprising do not reflect the views of Investor Uprising, PRNewswire, or its sponsors. Investor Uprising, PRNewswire, and its sponsors do not assume responsibility for any comments, claims, or opinions made by authors and bloggers. They are no substitute for your own research and should not be relied upon for trading or any other purpose.
Microsoft Corp Newmont Mining Corp. Omnivision Technologies, Inc. Priceline.com, Inc. Qualcomm, Inc. Sandisk Corp Southwestern Energy Co. Suncor Energy, Inc. Veeco Instruments, Inc. VistaPrint NV
PR Newswire's Terms of Use Apply | Privacy | Contact Us Copyright 1996-2012 PR Newswire Association LLC. All Rights Reserved. A UBM plc company.