What's Wall Street Thinking? Donuts Debut, AT&T Shifts, BlackBerry Squeezes, Warnings Season

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Dunkin DonutsWho needs a buoyant market when a stodgy doughnut maker can perform some crazy levitation trick?

Dunkin' Brands (DNKN) went public at $19 on Wednesday, bucking the downward malaise to close out the week nearly $10 a share higher.

It's hard to see the appeal of its flagship Dunkin' Donuts concept. This is a slow-growth company that has posted negative store-level sales in two of the last three years. Its Baskin-Robbins ice cream scoop shops have had it even worse, posting three consecutive years of negative comps.

Some investors will argue that this isn't a play on doughnuts or ice cream. Dunkin' is a popular morning stop for its namesake coffee. There is also some serious expansion potential in the West Coast. Well, expanding a sluggish franchise concept is easier said than done. If the coffee is such a big draw, why aren't investors bidding up shares of J.M. Smucker (SJM)? It's the Folgers parent that sells the packaged Dunkin' coffee in nonfranchised outlets.

If this is the kind of pop that sleepy concepts are drumming up in their IPOs, one can only imagine what will happen when hot chains go public.

Here are some of last week's other big surprises, blunders, and just flat-out boneheaded moves.

Unlimited Redefined

AT&T
(T) is at it again.

The wireless carrier that turned heads when it stopped selling unlimited data plans to new customers last summer is now playing throttling games with loyal data hogs that were grandfathered in after last year's move.

AT&T announced on Friday that, come October, it will begin slowing down network speeds for smartphone customers among the top 5% heaviest data users. The process will reset at the start of every billing cycle, multiple notices will be sent, and a grace period will exist, but how will this work out well for AT&T?

If this is a response to its overtaxed network, isn't this simply proof that the telco giant isn't doing enough to beef up its capacity? Even if it succeeds in shooing away its heartiest data sippers, it will also lose those who despise the practice on principle or fear that they'll be the next ones to step on the scale in this new weigh-in buffet.

BlackBerry Allergy

Sometimes even smartphone makers make dumb decisions. Research In Motion (RIMM) announced it would be eliminating 2,000 jobs, or roughly 10% of its workforce, last Monday.

Given RIM's sparkling balance sheet that is flush with $2.4 billion in cash and equivalents and no long-term debt, I wondered why cash-rich companies were engaging in layoffs.

There was a time when a corporate restructuring would draw cheers from investors, but shareholders have gotten smarter than some of the companies that they're buying into. RIM's stock shed 10.4% of its value last week -- coincidentally near its workforce trimming -- because it sends the wrong message about the future of RIM's flagship BlackBerry.

It's true that BlackBerry is no longer the star of the smartphone ball. Consumers and even RIM's hotbed of corporate clients are clamoring for Android and iPhone handsets. However, this is still a company with tens of millions of users that it needs to keep. Slashing payroll is not going to build up confidence the next time a major corporation needs to decide if sticking with BlackBerry is the right decision.

Warm to the Touch

It was a bad week for several companies that tempered their quarterly reports with weak near-term outlooks.

Navigation specialist TeleNav (TNAV), printing services provider Vistaprint (VPRT), solid-state-drive maker STEC (STEC), and Internet security Websense (WBSN) all hosed down their guidance for the current quarter.

They weren't the only party poopers, but these four stocks in particular suffered double-digit percentage dips as a result of their grim perspectives. They toil away in diverse industries, so this may be bad omen for the economy as a whole.

Why didn't they let us know sooner? The reason their stocks got slammed was because investors were blindsided with the slowdown at this stage of the economic recovery.

"Essential Information Protection" is Websense's ironic tag line. Really, Websense?


Longtime Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this story. The Motley Fool owns shares of Vistaprint and Research In Motion. Motley Fool newsletter services have recommended buying shares of Vistaprint and AT&T.

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americandoo

"TIME FOR BIG INVESTORS TO STEP UP TO THE PLATE LEAD AMERICA BY
INVESTING IN AMERICA" "WHEN YOU INVEST IN AMERICA YOU INVEST IN YOUR CHILDREN'S
FUTURE"

"INVEST IN A LARGE PROJECT THAT WILL MAKE A DIFFERENCE FOR THE FUTURE"
Similar to this idea; In past history when the USA needed a Moral Boost to our
Country we built such things as; The Largest Bridges, Dams, Statue Of Liberty,
Worlds Largest Futuristic Fair, Landed on the Moon etc.

It is overdue for us and time for us to build the Largest & Best Futuristic
CITY IN THE WORLD, using ALL OF OUR CUTTING EDGE TECHNOLOGY­.

Countries CUTTING EDGE TECHNOLOGY and BEYOND ALL OTHERS ! !

Find a location in the USA somewhere that has the space for our "FUTURE CITY
PROJECT"

Where Our Future City will Utilize all of the Newest and Cutting edge combined
technology in the world to build our City using entirely GREEN energy with ZERO
POLLUTION ! ! !

Our City Could Have A NEW VERSION OF THE STATUE OF LIBERTY, Holding
the torch in one hand and our GREEN PLANET EARTH in her other hand, her head
raised high looking Up at the sky.

This would make a GREAT FILM based
on a True Story with the help of A TEAM OF BIG MONEY INVESTORS ! ! !

Use your Imaginatio­n think how; GREAT THIS WOULD BE FOR AMERICA & OUR
ECONOMY ! ! ! !

"DREAM BIG...DO BIG"

Thank You, Respectful­ly, Michael V. Caldwell

August 05 2011 at 12:29 PM Report abuse rate up rate down Reply
bontonlynch

Crocs are truly the ONLY shoes I can wear and be on my feet any length of time with the pinched nerve in my back which begins a tingling sensation in my legs if I am on my feet for any length of time.

The writer of stories like this most likely have never worn a pair of Crocs shoes. They are no longer the ugly clog shoe, and the writer is very ignorant and should not be writing on a topic he does not understand nor tried.

August 02 2011 at 1:37 PM Report abuse rate up rate down Reply
SUERAM002

ATT complains about Data hogs? What about MONEY HOGGING???

August 01 2011 at 6:59 PM Report abuse +1 rate up rate down Reply
sp600

The reason AT&T has problems is their system can't handle the bandwidth load. They brag how great it is. Why do you think they want to buy T-Mobil? Because they will fill the VOID for theirs. Why do I know this, I use to work for them.....

August 01 2011 at 3:03 PM Report abuse +1 rate up rate down Reply