The five dumbest things on Wall Street this week

By TheStreet.com

1. Carl's snarl

Activist investor Carl Icahn joined the board of ImClone Systems (IMCL, news, msgs) this week and wasted no time in sounding off.

"During your tenure, I believe that commercialization has suffered, trials have not been sufficiently pursued, the head-and-neck data was needlessly delayed, patent suits have been lost and the company has not provided its stockholders the performance that they deserve," Icahn wrote in a letter to Chairman David Kies. "You should recognize that your leadership of ImClone should come to an immediate end."

Alas, Kies suggested he recognizes no such thing. He was re-elected chairman on Wednesday, a month after Kies staved off a proxy fight by welcoming Icahn, who owns 14% of ImClone, and two of his henchmen to the board.

"We look forward to Mr. Icahn's further input with regard to the company's governance," Kies said then, "and hope that it will be productive and given in a manner that maximizes the value of the company for all shareholders."

Icahn surely hopes so too, though his last saber-rattling campaign didn't work out quite that way. Icahn managed to prod slow-moving Time Warner (TWX, news, msgs) into a $20 billion stock buyback and a few divestitures, it's true. But shares of the New York media giant failed to respond to those moves.

So what did Icahn learn from the Time Warner fiasco? To combine threats with grandiose-sounding clichés, apparently.

"The time has come for you to peacefully pass the baton," Icahn warns in his letter to Kies. "If you fail to do so, you will have thrown down the gauntlet, and we will have to react accordingly."

By sending yet another menacing letter, no doubt.

Dumb-o-Meter score: 93. For more on the Icahn-ImClone's dumbness, click here.

2. Change in the weather

BP's (BP, news, msgs) reputation took another jolt Monday with news its Thunder Horse deepwater oil project in the Gulf of Mexico won't start pumping till mid-2008.

Of course, problems are nothing new at BP. Last week, the company discovered an oil spill in California. Last month, BP shut down half of its Prudhoe Bay field in Alaska after discovering pipeline corrosion. Last year, BP said it would spend $1 billion to correct safety defects tied to a fatal explosion at a plant in Texas City, Texas.

Thunder Horse was discovered amid much fanfare in 1999. BP called it the "biggest-ever find in the Gulf of Mexico" but, seven years later, the project hasn't pumped a drop of oil.

BP originally called the huge discovery Crazy Horse but ended up changing its tune after the Lakota Indian tribe and others complained.

"Thunder is generally regarded as a natural manifestation of power, similar to the strong reservoirs this project encompasses," BP explained in changing the name back in February 2002. "The new name and image are strong and memorable, as is the oil field we are in the midst of developing."

Strong and memorable, yes. Productive, no.

Dumb-o-Meter score: 91. For more on BP's dumbness, click here.

3. Amaranth and the pool sharks

Amaranth admitted this week that a series of bad bets on natural gas cost it more than $4 billion in trading losses. Only last month, Amaranth managed some $9 billion in assets and was up 20% for 2006. But now, founder Nick Maounis tells investors that Amaranth is down 55% for the year, putting its assets at about $3.5 billion.

Amaranth sold the remnants of its energy portfolio to J.P. Morgan (JPM, news, msgs) and others. It began liquidating its stock holdings to meet margin calls. Lawyers are sifting through the wreckage to see if there's anything suit-worthy.

Yet Amaranth remains true to its name. The firm's Web site is down now, but it previously advertised that Maounis dubbed the fund Amaranth after an antique pool table of that name "caught his eye."

Maounis "knew he had the perfect name for our firm," the Web site added, when he learned that in Greek, Amaranth means "unfading."

Losing $4 billion in a week is something, but it's not fading away.

Dumb-o-Meter score: 88. For more on Amaranth's dumbness, click here.

4. Ford's fast track

The latest twist on Ford Motor's (F, news, msgs) "Way Forward" restructuring calls for the elimination of 44,000 jobs over two years. Ford is also phasing out its dividend and closing more plants. Shares plunged 12% in a day.

"These actions have painful consequences for communities and many of our loyal employees," said Chairman Bill Ford. "But rapid shifts in consumer demand that affect our product mix and continued high prices for commodities mean we must continue working quickly and decisively to fix our business."

Fixing Ford's business is looking like no mean feat. The company promises better cars and trucks, but its core North American auto business won't swing back into the black till at least 2009. Just nine months ago, Ford was promising a North American profit in 2008. The future is looking so bleak that Ford reportedly even discussed an alliance with GM.

The cutbacks are only the latest detour for Executive Vice President Mark Fields. Bill Ford last September told him to rebuild the North American auto business, citing his rebound work in Europe and Asia.

Fields responded in January with a plan to cut 25,000 to 30,000 jobs by 2012. "We will be making painful sacrifices to protect Ford's heritage and secure our future," Bill Ford said in a press release at the time.

"Mark Fields and his team deserve credit for the accelerated Way Forward strategy," Ford said Sept. 15, "which puts us on an even faster product-driven path to success."

We'll take your word for it, Bill.

Dumb-o-Meter score: 85. For more on Ford's dumbness, click here.

5. Reboot camp

DELL (DELL, news, msgs) got the go-ahead this week on a big Army supply contract. The Defense Department agreed to buy computers, displays, printers and peripherals from Dell and others; all told, the deal could be worth $5 billion over 10 years.

The contract was well received at Dell, which of late has had precious little good news to report. The company has repeatedly missed financial targets and announced a huge laptop recall. This week it got a delisting notice from the Nasdaq.

But the setbacks certainly haven't dimmed Dell's sense of importance.

"Because of our long history and direct relationship with the U.S. Army, we have a thorough understanding of its technology requirements, both domestically and abroad," said Troy West, vice president of Dell's federal business segment.

And shrugging off the inconvenient fact that eight other companies share the contract, including rivals Hewlett-Packard (HPQ, news, msgs) and CDW (CDWC, news, msgs), West adds that Dell is "uniquely positioned to support the Army's global needs."

Something here doesn't compute.

Dumb-o-Meter score: 80. For more on Dell's dumbness, click here.

© 2006 TheStreet.com, All Rights Reserved.

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