Barry Ritholtz, musing over the bankruptcy filing of Blockbuster, wonders what company or sector will be the next to go:
CrowdQuery: Who is the next major company, business, or sector to go belly up?
Let’s consider 3 categories:
1) who goes down in 2010 or ’11
2) who is in danger between now and 2015.
3) Whose long term prospects are clouding up?
My ear is no longer as close to the ground as once it was and I couldn’t name a major player that is likely to “go belly up” in the next year. I do think that home construction, finance, auto manufacturing, and retail all are enormously over-built. I don’t see any likelihood that any of these sectors will return to their former heights and can only explain the degree to which they’ve held on as a product of the enormous subsidies they’ve received over the last couple of years. I think they’re all in a Wily Coyote moment, that frantic act of panic before gravity takes over.
I think that healthcare is over-built, too (not to be confused with over-performing). I wouldn’t be surprised if some health insurers and hospital chains are no longer with us five years hence but I think that based on the way the wind is blowing it will take many years for the gravy train to really reach the end of the line. I probably won’t live to see it.
Here are a couple of other WAGs of companies that it’s hard for me to see bright prospects in the medium run.
Gannett. Is there any area of the company’s business that’s doing well? Unless the new electronic billboards that I’ve been seeing around open up some new markets for the company I don’t see how it can survive.
Brunswick. Although when most of us think “Brunswick” we think about bowling (an area that’s been dwindling for the last 30 years), Marine really runs the show there. Asian competitors kicked them out of the small outboard business decades ago. It’s hard for me to imagine luxury power boats doing well over the next few years. I don’t have access to the details but I suspect they’ve got a lot of legacy overhead from the glory days dragging them down, too.
Other ideas?
I think personal computers will see a slump because of two factors: Software functionality moving online (ie. google docs) and the increasing utility of smartphones. Not sure if that will drive anyone under in the near term, but I think the computer industry faces some serious challenges in the future.
I’ll be dollars to doughnuts that Trans World Entertainment will be dead by 2015. They’re the owner of electronic store chains like Wherehouse and F.Y.E., and were the owner for defunct chains like Media Play. They’ve been taking losses since at least 2008, and they have a dying business model (the big dedicated video-CD-books store).
Borders — it seems to be getting extensions on its outstanding credit with the expectation that it can survive by merging with someone else like Barnes & Noble, or with it’s recent e-book launch that seems destined IMHO to be too little too late.
Yeah, I know my pick is lame, I had to google “Borders Bankruptcy” just to make sure it hadn’t already happened.
Can I pick an airline at random, or is that lame too?