When IHOP acquired Applebee's to form DineEquity (NYSE: DIN) back in July of 2007, I wrote this:

Maybe IHOP can work some magic and turn the chain around, but it might be difficult. The company is financing the entire acquisition with debt, and may not be so quick to provide the face lift the restaurants so badly need.

But then again, IHOP's revenue in 2006 was lower than it was in 2002. So maybe this is a case of two drunken sailors trying to hold each other up. There's nothing much to get excited about for shareholders of either company.

Since then the stock has gone from around $60 per share to $16, and Robinson Humphrey analyst Christopher O'Cull wrote in a note to investors that turning around Applebee's and refranchising stores to pay down debt is hardly an easy bet: "Even in a favorable economic environment this plan would be difficult to execute with little precedent within the restaurant industry. Now, given the weakening consumer backdrop coupled with tightening credit conditions this task will prove even harder." More ominously, O'Cull warned that if the company is unable to refranchise stores quickly, it may have to reduce its debt load "in a fashion that would be materially dilutive to equity holders." And with the stock price in the toilet, the timing couldn't be worse.

I don't take too much credit for being skeptical of the deal: betting on the failure of a large scale acquisition is like betting on Tiger Woods to make the cut at a Hooters Tour event.

A good rule of thumb that will save you from a lot of disaster: when a company you own announces a major acquisition, sell the stock.

On November 29, 2007, IHOP, now DineEquity (NYSE: DIN), announced it had completed the acquisition of Applebee's, with CEO Julia A. Stewart commenting that "We are delighted to complete the acquisition of Applebee's as it represents an opportunity to create significant long-term value for IHOP shareholders over and above what we could have achieved on a standalone basis." On that day the stock closed at $52.29.

The stock closed at $23.97 Monday, and will likely fall farther today following CFO Thomas G. Conforti departure after nearly six years, a fact the company disclosed in a press release euphemistically titled DineEquity, Inc. Announces Chief Financial Officer Transition.

Mr. Conforti "resigned from the Company effective immediately to pursue other opportunities." What those opportunities are, we don't know, but apparently they're more exciting than working at a company whose stock has declined by more than 50% in the past year.

Of course, it's always a red flag when a company's CFO resigns, and investors would do well to be skeptical here -- the move was abrupt, and no permanent replacement has been named.

Back when the deal was first announced, I wrote that "IHOP's revenue in 2006 was lower than it was in 2002. So maybe this is a case of two drunken sailors trying to hold each other up. There's nothing much to get excited about for shareholders of either company."

So far that's been an understatement but I won't take too much credit. The fact is that company-changing mergers and acquisitions rarely create value, and in the long run, betting against them is likely to produce a pretty good track record.

This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Crapplebee's below in the comments.

I first heard the nickname "Crapplebee's" from my brother, when I suggested that we go to dinner at Applebee's and he didn't think it was such a good idea.

I don't know that Applebee's is "crappy" per se; it's more that there's nothing especially unique about it. It's very similar to Chili's, T.G.I. Friday's, Ruby Tuesday's, and a whole bunch of other fast-casual chains with "apostrophe s" in their names. T.J. Palmer recently said about the restaurant that "It doesn't have anything that would make me want to come back."

What makes that a major burn is that T.J. Palmer is the founder of the company! You can read her version of the company's history at her website.

On November 29th of 2007, IHOP, now DineEquity (NYSE: DIN), announced that it had completed the acquisition of Applebee's, with CEO Julia A. Stewart commenting that "We are delighted to complete the acquisition of Applebee's as it represents an opportunity to create significant long-term value for IHOP shareholders over and above what we could have achieved on a standalone basis."

On that day the stock closed at $52.29. It closed recently at $25.49. That's a decline of more than 50% since the acquisition: Crapplebee's indeed!

Benningan's, the casual dining chain where I had many bad dates, and Steak and Ale, a chain I never visited, have filed for Chapter 7 bankruptcy protection, underscoring how cash-strapped diners are not finding deals like unlimited breadsticks all that tempting.

The two chains, which are owned by billionaire John Kluge, have been in financial hot water for months, according to The Wall Street Journal. The paper reports that the chains were so broke that they did not have enough money to pay their employees for the rest of the week.

"Metromedia Restaurant Group (Kluge's company) earlier this year violated several terms of a lending agreement with GE Capital Solutions," the Journal reports. "It had been in negotiations with lenders for months to stave off the filing, while closing some stores and looking for a buyer, said two people involved in the matter."

Rising labor costs and soaring prices for food are killing casual dining chains. Cheesecake Factory Inc. (NASDAQ: CAKE) recently reported disappointing second quarter results, which featured the biggest drop in same store sales in the dining chain's history. Last year, activist investor Nelson Peltz acquired a 14% interest in the company. Brinker International Inc. (NYSE: EAT), owner of Chilli's Bar and Grill, and IHOP parent DineEquity Inc. (NYSE: DIN) are both down by double digits this year.

There is no hope for a turnaround in these companies anytime soon. Much like diners in these establishments, investors in these stocks are in for a world of indigestion.