Looks Like These 5 Companies Will Go Out of Business in Next Few Years
Chief business correspondent Rick Newman comments in a US News article December 2011 that because of the recession that began 4 years ago, at least 11 companies are sure to go out of business. These companies are identified by their financial measures, stock prices and expected earnings for 2012. Some of the companies expected to suffer during next year include Netflix, Bank of America, Hewlett Packard, KB Home, Washington Post, Sears, Monster Worldwide, Eastman Kodak, OfficeMax, Research in Motion and Best Buy.
OfficeMax is on edge of going out of business because not only did they have a 75% stock decline, but they are faced with trying to compete with discount companies like Costco and Wal-Mart. These companies allow overspent consumers the opportunity to save money on some of their purchases. Even OfficeMax’s competitors like Staples and Office Depot have been able to keep the upper hand significantly when it comes to stock compared to OfficeMax.
Bank of America had a stock decline of 61%. Much of their crisis comes from them purchasing Countrywide Financial in 2009. Countrywide stuck them with billions of dollars in losses because of bad mortgages from European homeowners.
Netflix also had a decline of stock at 60% and may just be coming to an end in 2012. They suffered a major comedown last year because they wanted to separate two of their services between different companies; video streaming and DVD by mail. Considering Amazon and HBO, Netflix’s competitors were able to offer more of the same great products and services through one channel for a great price, analysts expect Netflix’s earnings to decrease significantly next year.
Oh, and what about Research in Motion who suffered a stock decline of more than 70%? According to Canada’s Huffington Post, as androids and Iphones grow, they will become more dominant than the 2009’s popular Blackberry which seemed to take over 55% of the US in 2009. According to RIM’s Vice-president Alan Panzec, many of the fortune 500 companies are still holding on to their Blackberry’s which leaves RIM to think they still have a chance.
While Blackberry is expecting an upgrade, it has been set back to a later date in 2012.
Sears, one of the largest retail chains coming in 4th place is experiencing over 30% in stock decline and has closed a lot of their unprofitable stores. While you expect them to be able to pull a comeback, their continuous slashing costs may leave them suffering this year.
Even with discounts, they will find themselves competing against large retailers like Wal-Mart, Target and online retailer Amazon. Many of these companies will find themselves taking drastic measures to pull their companies out of the pit. Let’s wait and see what happens.