Biggest Business Blunders of 2024
It was an ignominious year for economic forecasters, CrowdStrike, Boeing, FTX, Mattel, Truth Social, Red Lobster, Fisker, Spirit Airlines, TicketMaster and the dumbest bank embezzler in history
“The only real mistake is the one from which we learn nothing.” – Henry Ford.
Business Blunders happen even in a growing economy. Bankruptcies never go out of style. Fools keep parting with their money. And the cycle of fear and greed never ends.
Here are some of the biggest Business Blunders of 2024.
It’s the economy, stupid
The biggest blunder of the year was a widespread misperception about the strength of the economy.
In the first quarter of 2024, the nation’s most prominent prognosticators finally admitted they were wrong about a coming recession. But most Americans held fast to their wrong-headed views, mostly because of political attacks leveraging anger about inflation.
The nation’s economy grew all year long and is in fact the envy of the world with a gross national product that grew 3.1% in the third quarter. The stock market remains near all-time highs. The unemployment rate is at a historically vibrant 4.1% and inflation is running at 2.7%, down from 9.1% in June 2022.
To be sure, the price of just about everything is still painful, but that’s not how to measure the strength of an economy. Homeowners and stock investors, for example, have done quite well during this period of incessant partisan whining.
Economists and politicians who put undue credit or blame on a single president for the performance of a massive economy are either dishonest or need to take an Econ 101 course.
Do they really think the new administration is going to do better (assuming that presidents really have all that much to do with it, anyway)?
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Cyber-Insecurity
CrowdStrike, a firm that is supposed to protect its customers from cyber threats, unleashed one of history’s most destructive software bug in July, causing more than $5 billion in damages.
The glitch infected about 8.5 million computers with a “blue screen of death,” shuttering governments, businesses, hospitals, airlines and consumers around the globe.
Delta Airlines, for one, filed a lawsuit claiming more than $500 million in damages from canceled flights, ticket refunds and passenger accommodations. The health care industry suffered nearly $2 billion in estimated damages and the banking sector lost $1.15 billion.
We can only wait for another catastrophe like this to hit again as big tech consolidates and artificial intelligence accelerates.
Some stock analysts had predicted CrowdStrike would be “the hottest software stock of 2024.” Its shares plunged 44% when the outages hit, but it has largely recovered, even if many of the company’s customers have not.
Fly the felonious skies
Boeing agreed to plead guilty to a felony in July for misleading regulators about its 737 Max jetliner before two of its planes crashed and killed 346 people.
But a judge rejected the plea deal earlier this month because he didn’t like the diversity, equity and inclusion provisions for choosing a compliance official to oversee the agreement.
Many observers thought it was too much of a sweetheart deal, anyway. And so what? Boeing is already a convicted felon and it’s too big to jail.
Most people don’t remember the conviction Boeing racked up in 1989 for breaching national security, or its other past convictions.
It didn’t help when a door plug blew out mid-flight on an Alaska Airlines flight in January, terrifying passengers. Or when former Boeing engineers testified in Congress that Boeing wouldn’t hear their safety concerns about cost-cutting and outsourcing. Or when its Starliner stranded astronauts in space. Or how American Airline has to cut international flights because it can’t get Boeing jets. Or … (name your favorite Boeing fiasco here.)
FTX: From bitcoin to beans
You’d think with all the billions Sam Bankman-Fried stole from his now-defunct crypto exchange FTX, he could have put up a better defense.
On March 28, Bankman-Fried, 32, received a 25-year prison sentence and a court order to forfeit $11 billion following his conviction on fraud, conspiracy and money laundering charges.
His girlfriend, Carline Ellison, who ran the intertwined firm, Alameda Research, testified against him and caught a break. She received only a two-year sentence in September for her role in the fraud.
Among other top executives convicted, FTX Digital Markets CEO Ryan Salame received a 7.5 year sentence last year. He tried to take back his guilty plea in August after prosecutors filed charges against his girlfriend, which he thought they would not do if he pleaded nicely. So sorry, Salame. Should have read the fine print in the plea agreement.
Somehow, Bankman-Fried got no love from our two-tiered justice system that usually favors people who steal enough money to afford top-notch legal counsel.
Both his parents are Stanford law professors, he had access to millions of dollars worth of lawyers, and none of them could save him. Goes to show that when you con Silicon Valley the way Bankman-Fried did, they can get you.
Bankman-Fried used to take private jets to FTX’s live-in headquarters in the Bahamas, and he put the FTX logo everywhere from a Miami basketball arena to a Formula 1 race car. He ran a memorable Super Bowl commercial staring comedian Larry David, courted many other celebrity endorsements, made huge donations to Democrats, and even bragged that he might one day buy Goldman Sachs.
Now he’s trading beans and rice from a prison commissary.
Typo of the year
To whoever wrote “wicked.com” instead of “wickedmovie.com” on Mattel’s packaging for commemorative dolls:
I know that horrible, sinking feeling and the shame of an error that everyone can see.
So sorry, but typos happen. Accidentally omitted words are one of my most common errors, and anyone laughing may be setting themselves up for their own stupid goofs.
The error on the doll boxes sent children to a porn site and Mattel into crisis PR mode. Two weeks before the highly-anticipated film hit theaters on Nov. 22, social media was abuzz about the gaffe.
“Parents are advised that the misprinted, incorrect website is not appropriate for children,” the toymaker said in news release. “We deeply regret this unfortunate error and are taking immediate action to remedy this.”
A South Carolina mother seeks $5 million in damages against Mattel claiming her young daughter went to the website. Her “minor daughter immediately showed her mother the photographs and both were horrified by what they saw,” the lawsuit reads.
And where were the parental controls on the home computers? Let’s just hope $5 million is enough for therapy.
Does Truth even matter?
In September, I noted the sharply plunging shares of DJT, the stock underlying Donald J. Trump’s Truth Social. The stock was down more than 77% from the blustering heights it achieved after it began trading publicly on March 26.
The company still loses money each quarter. It hasn’t provided audited financials. And now there’s this other social media outlet for Trump fans called X (or is that just president un-elect Elon Musk?).
Being right about the fundamentals doesn’t matter when you’re wrong about the momentum. At least have the nation got it wrong. Who knew America would actually elect a convicted felon to run the nation?
DJT shares have risen from the bottom price of $11.75 to nearly $36. And Trump’s stake is worth $4 billion – more than he’s ever dreamed of making hawking athletic shoes and Bibles.
Strike two for electric carmaker Fisker
Henrik Fisker abandoned investors, creditors, employees and customers on the side of road when his namesake electric car company filed bankruptcy in July.
It wasn’t his first massive failure. His first electric car company went belly up in 2013.
Why did anyone bet on him again? Fisker went public in 2020 through one of those low-accountability Special Purpose Acquisition Company, or SPAC, deals – raising billions from unwary investors. Its major offering was a seductive, but glitchy SUV called the Fisker Ocean.
Fisker’s market capitalization had once soared to nearly $8 billion, but it only delivered 6,400 vehicles.
Another lesson learned: If at first you don't succeed, file, file again.
Restaurants loaded their plates … with debt
It wasn’t the bungled endless shrimp promotion that sent Red Lobster into bankruptcy court in May.
The seafood peddler followed the same recipe that lands so many other companies into bankruptcy: Reckless amounts of debt.
After ditching its debt in a Chapter 11 reorganization, the iconic chain is now trying to claw its way back with a new owner.
It was a tough year for restaurants, sending more than 30 chains and large franchisees into banktupcy, including, TGI Fridays and BurgerFi.
Pepto Biz-Mol, anyone?
Spirit Airlines gave up the ghost
Spirit Airlines landed in bankruptcy court in November, piled with debt and suffering mounting losses as it battled increased competition.
This is the carrier that helped pioneer the business of luring customers with loss-leader fares and then slamming them with an annoying array of charges.
The Miramar, Fla.-based airline is a forerunner of everything we hate about commercial air travel, including fees just to carry your own damn bag on the plane.
The flaw in its business model is that it can easily be replaced by another set of number-crunching executives and investors willing to offer lower fares and show even lower corporate pride.
Spirit hopes to flutter out of bankruptcy early next year after stiffing its debtholders.
There’s no shame in it because the bankruptcy process has been one of the many ways U.S. commercial aviation has subsidized itself as it competes with deceptively low fares.
Legal woes mount for Ticketbastard
Some concert goers call it “Ticketbastard” for all the glitches and junk fees they suffer.
Ticketmaster doesn’t care. It’s too big to care. But this year, the U.S. Justice Department decided the folly had gone on long enough. In May, the regulator filed an antitrust lawsuit with 30 state attorneys general against Ticketmaster and its parent company Live Nation Entertainment.
“Live Nation relies on unlawful, anticompetitive conduct to exercise its monopolistic control over the live events industry in the United States at the cost of fans, artists, smaller promoters, and venue operators,” said Attorney General Merrick Garland. “The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services. It is time to break up Live Nation-Ticketmaster.”
In October, Ticketmaster customers slapped Live Nation with a lawsuit for the way it managed a data breach that exposed the information of 560 million users.
It took the company two months to discover the breach and four months to finally notify impacted customers.
The dumbest bank embezzlement ever
The CEO of Heartland Tri-State Bank in Elkhart, Kan., embezzled more than $47 million and gave the money to crypto crooks.
The small-town bank subsequently failed in July 2023, and in August, a federal judge sentenced Shan Hanes, 53, to more than 24 years in prison after he pled guilty to embezzlement.
Bankers are supposed to be on high alert for hustles, but Hanes fell right into one. Inexplicably, he landed in a pig-butchering scam, which involves enticing victims to make increasing contributions by appealing to their greed until they are finally slaughtered.
The Year In Blunders
So many blunders, so little time.
I launched Business Blunders in March after getting laid off in February from another idiot-owned startup media company.
Most big business publications get their clicks telling readers what stocks to buy, which billionaires to worship and how maybe they can get rich one day, too.
I’d rather highlight the incompetence and dishonesty that pervades our financial world in hopes of making it a better place. I also want to leave readers with street smarts instead of market noise and hype.
Here’s a complete list of Business Blunders newsletters so far. I put out most of these pieces free, but posts more than three weeks old are archived for paid subscribers.
Business Blunders is a reader-supported publication. Thanks so much for staying with me through 2024. Happy New Year!
Go To Zelle This Week in Blunders – Dec. 15-21
Basketball Jones Former Harlem Globetrotter and NC State point guard gets seven years for a Covid-19 loan scam'
A CEO’s Road To Hell It began with forbidden love and ended in felony charges for Comtech’s Ken Peterman
Sorry About That Opiod Thing This Week In Blunders – Dec. 8-14
Spoiled, Rotten Day Trader Ian G. Bell touted a wealthy background to allegedly dupe investors in his money-losing investment scheme
Shot In The Back Did maddening back pain drive Luigi Mangione to murder UnitedHealthcare CEO Brian Thompson?
The Killionaire Here's why the man who gunned down UnitedHealthcare's CEO became an instant folk hero
Enron Was A Parody Of Itself Here's where CEO Ken Lay ate before he died
Big Blunders Come In Small Packages Macys blames an employee for hiding 'small package delivery' expenses. Anyone remember the boxes at Miniscribe?
Billion-Dollar Reprobate Bill Hwang lost billions investing 'according to the Will of God.' Now he's going to prison for cheating Wall Street banks
Hitting The 'Undo' Button At FTX Gary Wang wrote the code that enabled an $8 billion fraud. Prosecutors and a federal judge sang his praises
Ponzi Once, Ponzi Twice A New Jersey man got probation for running a $300 million scam. Then he launched a $658 million fraud with ads on Fox News
Hello? What About The $36 Trillion Tab? America's balance sheet is about to get worse and Republicans don't care
A Mouse That Roared A small-time CEO launched a proxy war with $17.32 in his company's brokerage account. Now he's going to prison.
Bozo Bezos The Washington Post's billionaire owner makes a clownish excuse for killing a presidential endorsement
CEOs Gone Wild Abercrombie & Fitch had to know its CEO was a freak
X Marks the Spot An Alabama man hacks the Securities and Exchange Commission with an iPhone, then returns it for a refund
Danger, Will Robinson Destiny Robotics promised AI-powered humanoids that could form meaningful relationships, but it delivered a wig stand
All the Kosher Meals You Can Eat Lufthansa gets sacked with a record fine for banning Jews from a flight
Magic Mushroom ‘Pump and Dump’ Here's what can happen when 'shroom heads take control of a penny stock
InHumana Bad reviews matter, and this health care insurer is paying a hefty price for ignoring them
And the Winner is … Walmart The nation's largest grocer must be loving government efforts to break up the $25 billion Kroger-Albertsons deal
The Incredible Shrinking Billionaire The chips are down for EchoStar's poker-playing Charlie Ergen
Plastic Balls ExxonMobil put polymers in our testicles
Bankster Bonus A top Old National Bank executive bags $2.6 Million after his arrest for allegedly molesting a child
Watery Grave CEOs usually don't implode as literally as OceanGate's Stockton Rush
Drivin’ that Train It's the end of the line for the embattled Norfolk Southern CEO
Stinky Stonk Anatomy of a nightmare investment that's poised to get worse
The Music Man Michael Smith allegedly played his AI-generated music billions of times to bots, ripping off streaming services and artists
One Sorry Ferrari Online gaming CEO hustles car broker and scams investors with an IPO that never happened
Adam Family Brothers allegedly raised $60 million with a phony crypto bot and spent investors' money on new homes and luxury goods
Clowns in Court An FTX felon wants to take back his guilty plea after prosecutors charged his girlfriend with campaign finance violations
Piggy Banker A Bank CEO robs his own bank while crypto scammers rob him
The Wonders of Blunders Why I follow business failures, and why you should, too
Holy Payday Batman A CEO bags $250 million driving his hospital chain into bankruptcy
Design Your Life An alleged Ponzi schemer bagged $1 million a day with happy talk
Nike Air Athletic-apparel giant's top executives preach climate change as they rev up their corporate jets
If you can't woo 'em, sue 'em Elon Musk ran off advertisers; now he's suing them for leaving
Drunken Chicken Tyson Foods' suspended chief financial officer could make a comeback
In Real Life A "serial founder" finds a serial sucker in SoftBank
Smoke on the Water Luxury Miami condo association sues to evict chain-smoking fraudster
Beyond Stupid TV stock tips are for chumps
Canary in a CrowdStrike Cybersecurity giant's blunder is a warning for the whole world
Boeing’s Lost Spirit Outsourcing proves bad for business
Lizards of Ozy The chameleons at failed Ozy Media are turning orange
A Harvard Business Blunder Graduates duped in a ridiculous Ponzi scheme
Con Air Fly the felonious skies with Boeing
Smell the Glove Milwaukee Tool reeks of forced Chinese labor, lawsuit alleges
Fisker the Frisker An electric car entrepreneur offers a valuable business lesson: If at first you don't succeed, file, file again
Musk Mouth It takes a genius a long time to address an obvious blunder
Sorry Seems To Be the Hardest Word A simple apology proved difficult for crypto tycoon Do Kwon after the $45 billion collapse of his Terraform Labs
Epoch Crimes The finance chief of a far-right publication allegedly went far wrong
Ticketbastard Live Nation deserves every ounce of contempt it has provoked
How to Boil a Lobster Endless shrimp didn't drive this soggy seafood chain into bankruptcy
Take Out Your Trash The Federal Deposit Insurance Corp. insures bank deposits, bullies, racists and sexual predators
Sam in the Slam FTX founder Sam Bankman-Fried invests in beans and rice
Billionaire Prison Time Here's how a hedge fund honcho managed incarceration
‘Bitcoin Jesus’ Saves Crypto promoter charged with dodging $48 million in taxes
The Power of Red Failed Republic First Bancorp learns that 'fans' are fickle
Our Deadhead Fed Head Jerome Powell has flubbed inflation
Google This Billionaire A Silicon Valley legend makes his dumbest trade ever
Don’t Listen to Sam Boeing engineer warns of 'catastrophic accidents and passenger fatalities'
Calling Spirit Airlines on the Ouija Board Will customers miss this carrier if it dies?
Musk’s F-Ing Message The genius of our age is scaring Tesla's customers
A CEO Who Made His Bed Mattress Firm's latest buyer may be short on memory foam
They Bought Crypto From a Klepto FTX founder Sam Bankman-Fried's trail of tears spills into court
What’s in Your Wallet? Abusing company credit cards is a common employee grift
My Latest Blunder Lessons from an epic failure at The Messenger
The biggest blunder is to believe anything the government says.