2010's dumbest things on Wall Street
From the flash crash to Tony Hayward's relentless idiocy, we sift through the past year for the most glaring gaffes.
By TheStreet Staff
This is part 2 of TheStreet's year-end special. (Click here for part 1.)
1. Moron of the Year: Tony Hayward
For several months during summer 2010, BP CEO Tony Hayward was the Energizer Bunny of Idiocy. Still, seven weeks after the Deepwater Horizon explosion and the resulting horrific Gulf of Mexico oil spill, Hayward delivered what would prove to be the epitaph on his executive gravestone.
Originally published June 4: If only BP (BP) chief executive Tony Hayward could force a plug into his leaky oil well as firmly as he shoved his foot into his mouth, then this oil-spill nightmare would be over.
The embattled oil executive said in an interview that he would "like his life back," even as the massive spill continued to cause havoc along the Gulf coast. Hayward later apologized in a post to BP America's Facebook page, saying he made a "hurtful and thoughtless comment."
"When I read that recently, I was appalled," Hayward said.
You weren't the only one, dude. Eleven rig workers died on the BP-leased drilling platform when it exploded on April 20, and you can bet their loved ones would give anything to get those lives back as well.
2. Fannie, Freddie and other F-words
The demise of Freddie Mac and Fannie Mae was less of an actual dumb thing, in and of itself, than a paragraph in the long, dumb history of capitalism. But in mid-June both finally succumbed, marking the closing of a chapter in the Great Recession.
Originally published June 18: Make way, everybody! The trillion-dollar gorillas are leaving the room.
The move to the minor leagues was not altogether unexpected. NYSE rules require a company to take action or delist if its shares languish below a buck for 30 trading days.
Still, it's quite shocking to see companies that together own or guarantee almost 31 million home loans worth about $5.5 trillion get the boot. Or, to put it another way, you know things are bad when mega-losers like AIG (AIG) and Citigroup (C) are still hanging around while the two companies that control nearly half of all U.S. mortgages get escorted from the building.
Then again, at least AIG and Citigroup are operating under the pretense that they will repay Uncle Sam. That's certainly not the case with Fannie and Freddie, which have already sucked up nearly $150 billion in taxpayer funds and will likely request more bailout dollars down the road.
3. One very bad Apple
In June, Apple unveiled the iPhone 4 -- and unwittingly unleashed "antennagate." And then, as is often case with corporate dumbness, the company's ham-handed response made matters far, far worse.
Originally published July 16: Apple's new iPhone 4 may not be as bad as the company's infamous Newton, yet that is not stopping Consumer Reports from bonking Steve Jobs on the head. Shares of Apple (AAPL) sank more than 2% after a troubling CR review of the newest iPhone concluded: "Apple needs to come up with a permanent -- and free -- fix for the antenna problem before we can recommend the iPhone 4."
The major malfunction with Apple's newly redesigned iPhone is a faulty antenna that gets knocked out when the phone is held a certain way -- a problem that has persisted since the phone's introduction last month.
Curiously, Apple seems unwilling to accept the fact that one of its gadgets has a problem at all. Like a parent who does not want to admit that his child is indeed imperfect, Apple initially blamed users for reception difficulties, telling them to hold the phone differently.
4. The flash crash
Perhaps you heard about a little thing called the flash crash. Perhaps it gave you pause. Well, apparently, the SEC did not share your concerns, as almost five months after the May crash, it had yet to offer at any legitimate explanation for it.
Originally published Oct. 1: There's been a lot of talk about "fat fingers" this year, what with all the mysterious flash crashes bedeviling the best minds of the markets. This week, after the latest flash crash hit shares of Progress Energy (PGN), investors may have reached the point where the only fat finger they're thinking about is their own middle finger being raised in the face of the SEC and the exchanges.
There were actually two mysterious news items this week about Progress Energy. On Monday, more than 4,000 customers were left without power after a snake slithered into a switch and shorted the circuitry. Progress Energy restored service in about two hours.
Investors, on the other hand, are still left in the dark about the latest flash crash, during which shares of Progress Energy slid from $44.50 to $4.57 in a millisecond early Monday afternoon, making the company's stock chart look like a Robert Downey Jr. EKG printout during a night of partying.
5. Gap's bogus logo
In October, Gap executed one of the most inept efforts at branding since the Omega-house initiation in "Animal House." With no apparent need to replace its iconic blue-box logo, Gap half-heartedly tossed a new one onto its website. And then all heck broke loose.
Last week, the once iconic and culturally relevant retailer quietly introduced a stunningly dull redesign of its logo to its website. No fanfare. No 80-foot billboards in Times Square. Not even a dashed-off press release filled with marketing drivel about how the new logo reflects man's constant drive to achieve universal harmony through ill-fitting jeans and multicolored scarves. Hey, at least that would have showed it cared.
No, there was nothing. And in lieu of all that, within a day, the design community had pounced, with vitriol and mockery exploding on blogs and on Twitter. As Bobby Solomon, on the art and design blog Kitesunenoir.com put it, "This is some shabby work. . . . There was a lot of brand equity in that big blue square and they didn't move far away enough from the source for this logo to even begin to feel new or exciting."
A lot of equity indeed. According to a study conducted by Interbrand, Gap is the 84th-most-valuable brand in the world, valued at nearly $4 billion.
Then, with the backlash building, Gap decided to make everything worse by backtracking in the worst way possible. The company took to its Facebook page and Twitter and declared that it was "thrilled to see passionate debates about the logo unfolding!"
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