Companies That Won’t Make It Through 2009

[SoCalDem]

http://www.247wallst.com/2008/12/companies-that.html

Companies That Won’t Make It Through 2009 (HMC)(SIRI)(AIG)(FRE)(FNM)(RAD)(NYT)(NT)(PIR)(CHTR)(HOV)

AngrybearA lot of fairly well-known public companies either disappeared or went bankrupt this year. Circuit City is on the list. Based on the most recent news GM may get added soon.

24/7 Wall St. looked at some of the largest and most well-known companies, reviewed their SEC filings if they are public, analyst reports, and media observations about their businesses and picked ten that probably won’t be around at the end of next year. That does not mean that their brands will disappear, but these companies will have been dissolved as the world knows them now or working though the court system in the hopes of getting Chapter 11 protection and a chance at survival.

1) Chrysler already says it will be out of business by early next year. But, what does that mean. It is unlikely that its largest shareholder, hedge fund Cerberus, is going to throw good money after bad in an economy where US car sales are dropping 30% compared with 2007 figures. But, the Chrysler brand could be around. So could the brand of its Jeep division. Foreign car companies like VW and Honda (HMC) would love to get well-known operations without the baggage of debt, UAW contracts, and dealer networks. Chrysler still has some popular models including it 300 series cars and it created the minivan. Jeep is regarded as the grandfather of four-wheel drive. Watch Chrysler Motors LLC go away and some of its products move into other hands.

2) Sirius XM (SIRI) has traded under $.10 down from a 52-week high of $3.89. Reuters has reported that "Sirius XM faces some $1.1 billion in debt in 2009. Of that, about $300 million comes due in February." In the current credit environment, that probably won’t happen. There is a theory that falling car sales will undermine the sale of Sirius subscriptions. The company says that it does no better than break-even in the first year it gets a new customer though GM. But, a shrinking subscriber based is not good news for the satellite radio company’s future. Sirius will be out of business, perhaps before mid-year. Who picks up the pieces? The logical choices are a healthy car company like Toyota or a satellite firm like DirecTV.

3) AIG (AIG) may be the biggest mess of all the financial firms that the federal government has bailed out. Uncle Sam has given AIG $153 billion in loans. The theory is that the money gets paid back by the huge insurance company selling assets. Investors don’t seem very sanguine about that. AIG shares trade at $1.60, down from a 52-week high of $60.04. Congress seems less and less enamored of having a lot of money sitting in troubled companies. Watch for the new administration to get frustrated quickly and appoint its own people to auction off AIG divisions. Better to get something back than keep writing AIG checks.

(after we GAVE them 150Billion? WTF!)

snip

[Clear Blue Sky]

1. SIRI paying fat contracts to Howard Stern and Oprah.

[burythehatchet]

11. Looks like the goose laying the golden eggs was roasted for the holidays

[MrsBrady]

2. not my xm, seriously -- no sarcasm

that's the only way we get "america left"

[Medusa]

5. I love my XM---

i'd hate to lose it.

[littlebit]

6. Me too

I think I would go insane without my Sirius.

[8 track mind]

19. I can't function with out XM40 "Deep Tracks" n/t

[Robbien]

3. Cerberus loaded Chrysler up with debt when it bought it last year

Cerberus put very little of its money into the pot when purchasing 80% of Chrysler. This purchase was similar to what Zell did when it took over the Trib. Both companies were loaded down with billions of dollars of debt which it could not possibly service and both are now facing bankruptcy.

Hedge funder Cerberus made out like a bandit in the Chrysler buyout and has now fixed its greedy eyes on the bailout money.

[Double T]

4. 2009 is going to be a bloodbath for many thousands of corporations.........

and many millions of employees. I hope the Obama Administration has lots of tourniquets to keep the economy from bleeding out.

[MadMaddie]

7. The way I see it is that the government is going to end up

being the biggest employer until new companies and existing companies can start hiring workers.

I keep hearing people choking on Obama's estimate of what it will cost....what the heck do they expect? Nothing is free...the Repugs will try to impede progress so be prepared.

[blue_onyx]

8. I hope Chrysler can make it

It may not be in the same form it is today and could be owned by a foreign company, but that is fine. I knew, as did most people, that Cerberus had no intention of making Chrysler a viable company. They were out to get the most money out of Chrysler has they could...even if that meant breaking the company into pieces and sell them. I would prefer Chrysler be kept whole. If, for example, a Chinese company buys Chrysler in order to break into the US market, that would be fine. Any option other than Chrysler just going away sounds great.

Rite Aid has been going down hill for a while. We use to have more around me but now we mostly have Walgreens and CVS. The one Rite Aid nearby is run down, disorganized, and I don't go there unless they have a really good sale on something I need.

[alfredo]

10. China is hurting right now because nobody is buying their consumer

thingies. They could be in deep shit if this recession/depression is long and deep. Last week there was news of unrest in China because of the people being thrown out of work.

[silverojo]

15. Poor fucking babies

Now they know how we felt when they stole our jobs. Shoe hurts like hell on the other foot, doesn't it?

[alfredo]

22. You profit off of mindless consumerism, you will have to suffer the

occasional recession and depression.

[Sen. Walter Sobchak]

9. Sirius

Sirius will go through bankruptcy and be bought by Echostar, but it will survive more or less intact.

[RB TexLa]

12. AIG still has American General to sell off, they aren't going to do that till there is some time

distance from the government bailout. American General has kept it's own CEO as a division of AIG and has been used to prop up a lot at AIG. The portfolio of American General's life business is solid as it gets. They could spin it back off and clean up with any type of slight turn in the economy.

[Idealism]

13. AIG will continue to be propped up at every turn

Without AIG, Wall street can't maintain the fascade of hedging risk. If AIG were to go under, the credit default swaps they've sold would trigger a global financial nuclear winter.

[southerncrone]

14. Circuit City deserves to go under after what they did to their long term employees.

They fired those making higher salaries who had earned them after years of good sales. Then turned around & wanted to hire them back at minimum wage.

Screw 'em.

[blogslut]

16. Just gotta say something about Pier 1

Years ago, Pier 1 Imports was this funky little chain that sold affordable doodads, thingamabobs and knick-knacks. (The one in my home town even had a saltwater/freshwater fish department.) Then, I guess, they decided to go all corporate in order to "expand the brand" and screwed everything up by attempting to paint themselves as some sort of high-end, fancy schmancy, whatever the fuck they turned out to be. It broke my heart when they "re-imagined" themselves and I saw it as yet another, it-wasn't-broke-but-they-decided-to-fix-it-anyway bullshit move.

I think there are some MBA professors that need to be taken out back and shot. They have done nothing but fill their student's heads with unrealistic, unprofitable concepts of what 'success' really means. They know nothing and they have done nothing but ruin lives and fortunes.

[Double T]

18. Everything MBAs and wall street touches turns to shit.

I'm not sure Americans are yet willing to accept that.

[summer borealis]

17. The New York Times???

I don't think so. Beware of lists like these this time of year.

[8 track mind]

20. i fucking hope you're happy freepers.

the economy is going to fucking hell, we have GI's getting blown up in the middle east, but at least those gawd awful gays and lesbians can't get married. Praise Jeebus!!!!

:sarcasm:

Nice fucking job you ass faced dickhead repukes.......

[blues90]

21. My two cent's

I have always felt that it was the willingness of the american people who allowed this horror to be launched.

Once the abominations called box stores came along and rather than do without an item that could be done without people went for the cheap deal.

This mindless madness opened the door and floodgates to all is fair in kill the independant business. It allowed larger companies to buy out smaller companies who merged into giants who could give a damn about the worker or quality or conscience.

Now the big box stores are failing from the very mindset they created and we all fail because of the willingness to be controlled by the false use of the word SAVE!!!!

Technology became an addiction of a different sort, rather than the old popular cigarette killing people it has become the addiction to things we all lived without like cell phones and every other electronic device spread across the store shelves , on the TV and magazine ad's. Instead of killing with smoke they smoked the mind and drained the wallet and destroyed community.

Once addicted people cannot stop no matter what the addiction might be or what the methode of ritual involves. In the end the result is much the same.

We allowed it and did it to ourselves, reference the Movie Network. We have been warned for decades.

[dysfunctional press]

23. last year, two of the companies that wouldn't make it through 2008- motorola and sears.

i don't know how they fared on their other 8 wild guesses.