Depending on how quickly your years fly by, we’re either just a little away from 2020, or we still have far to go. No matter what happens between now and then, though, there will be some companies that thrive, and some that falter. I have come up with three companies that clearly show no sign of making it to 2020 in their current state. While these companies will likely produce some harsh feedback amongst the blogging community, I stand by the fact that all three of these companies will not survive (by themselves) through 2020.
So, just which companies am I speaking of? Well I have on my list GameStop Corp. (NYSE:GME), Groupon Inc (NASDAQ:GRPN) and Research In Motion Ltd (NASDAQ:BBRY). All three of these companies have something wrong with them, something that will break them in the end.
GameStop is in the business of video game retail sales. I can tell you that both Sony Corporation (ADR) (NYSE:SNE) and Microsoft Corporation (NASDAQ:MSFT) will be making a push towards digital sales in their next consoles in order to curb used game sales. GameStop will not survive without their used games sales business. This company will be eaten up pretty quickly unless they find a way to innovate and come back to market with some new products. GameStop time of death: 2017.
Groupon is a weird one; they have plenty of sales, but they’re still losing over a million dollars every single day. The problem comes in when retailers don’t see the benefits that Groupon have promised. Retailers all around are expecting traction after the sales, but a majority of them are seeing customers just drop right off. That’s because a lot of the consumers on Groupon see the bargain and buy it that one time, with no plans to go back. To defeat this, Groupon may have to come up with better pricing for retailers or even be acquired. This company as it stands will not last out the decade. Groupon time of death: 2016 or acquired prior to then.
Research In Motion is a fun one right now. I wrote an article about them some time back and was bashed for even calling this company bad. It is most definitely a horrible company with horrible prospects, and I’m not afraid to say it. Research In Motion will be acquired for their patents, and that is all. This company will not make another great phone, and they won’t go making billions in profit per year. They’ll continue to squander money, and eventually bankruptcy will be declared. Research In Motion time of death: 2014.
GameStop has a market cap of $3.1 billion and a P/E ratio of -8.85. That P/E ratio came out to be because of some write-downs in the October quarter. Aside from that, this company is making money. It won’t continue though. I think that this Christmas season will likely be the last good one for the company. Games will become easier to access and download, and there likely won’t be too much of a need to stop by a local Gamestop. The lack of debt will keep them going for a while, but over time it will become more and more apparent that it is time to close up shop. The standalones will go first, leaving just the mall GameStops to a long, drawn-out death.