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10 Worst-Managed Companies of 2010

Sirius XM Radio (SIRI - Get Report): After last year's article, I had several open and honest discussions with the CFO of Sirius. I promised that I would be open-minded about Sirius should the company prove to turn things around. Sirius has gone from generating losses to break even and might post a profit next year. The balance sheet is pretty much in the same condition as it was a year ago.

As I feared, the renewing of Howard Stern's contract is an issue that Sirius must contend with, which it is doing now. More work needs to be done, and I want to see a more extensive business model because I also fear that Sirius could wind up being a transitory technology. The stock has been an outstanding performer in the last year, rising nearly 130%. For now, Sirius remains in purgatory.

>>Also: How to Trade Fad Stocks

Jamba Juice (JMBA): Jamba Juice continues to generate losses, just not as much as it did in 2009. That is no saving grace as far as I am concerned. Investors willing to speculate on the stock last year got over a 40% return. I still think that Jamba Juice is going to have a tough road to survival.

Class of 2010

I herby confer upon the following companies the distinction of being the newest inductees to my Worst-Run Companies list:

Yahoo! (YHOO): Jerry Yang had the opportunity to sell Yahoo! to Microsoft (MSFT) for a nice premium a few years ago, but his ego got in the way of shareholder's best interests. In January 2009, the company brought in Carol Bartz to try to turn it around. Despite her cheerleading and promises, she has not delivered. Now it appears that the company may be sold to a private equity firm or consortium of private and public investors.

The real value in Yahoo!, despite all of its excellent content, is in its investment in Alibaba, a Chinese ecommerce company. Yahoo! is failing to grow the monetization of its own content at a level consistent with its competitors. The company has also missed the explosive growth in the smartphone/mobile telecom market, which I consider a big misstep. Whether it is under Wang or Bartz, Yahoo! is a poorly run company. Welcome to the list.

>>Who Owns Yahoo!?: Carl Icahn

Boeing (BA - Get Report): I was very temped to put Boeing on my inaugural list in 2006. I hesitated and waited. Perhaps, I thought, the 787 project would put the company over the top. Instead, that project has become one of worst-managed industrial projects of all time. Repeatedly, first delivery of the 787 is constantly being delayed. I'll believe management's promises regarding the delivery schedule when I see the plane actually delivered.

>>Also: Cramer's Always-a-Bull-Market-Somewhere Stocks

Boeing, which has had several other management blunders in the past, qualifies for this list based on two of my above criteria: ineffective management and strategic mistakes. Because the company is part of the commercial aircraft duopoly, it may be a decent investment in the future, but since 2006, the stock has gone on a round trip to nowhere. The same can be said for other defense contractors, such as General Dynamics (GD) and Lockheed Martin (LMT). On second thought, maybe this is just a worst-run industry.

>To see these stocks in action, visit the Worst-Run Companies portfolio on Stockpickr.

-- Written by Scott Rothbort in Millburn, N.J.


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At the time of publication, Rothbort had no positions in stocks mentioned, although positions can change at any time.

Scott Rothbort has over 25 years of experience in the financial services industry. He is the Founder and President of LakeView Asset Management, a registered investment advisor specializing in customized separate account management for high net worth individuals. In addition, he is the founder of, an educational social networking site; and, publisher of The LakeView Restaurant & Food Chain Report. Rothbort is also a Term Professor of Finance at Seton Hall University's Stillman School of Business, where he teaches courses in finance and economics. He is the Chief Market Strategist for The Stillman School of Business and the co-supervisor of the Center for Securities Trading and Analysis.

Mr. Rothbort is a regular contributor to's RealMoney Silver website and has frequently appeared as a professional guest on Bloomberg Radio, Bloomberg Television, Fox Business Network, CNBC Television, TV and local television. As an expert in the field of derivatives and exchange-traded funds (ETFs), he frequently speaks at industry conferences. He is an ETF advisory board member for the Information Management Network, a global organizer of institutional finance and investment conferences. In addition, he is widely quoted in interviews in the printed press and on the internet.

Mr. Rothbort founded LakeView Asset Management in 2002. Prior to that, since 1991, he worked at Merrill Lynch, where he held a wide variety of senior-level management positions, including Business Director for the Global Equity Derivative Department, Global Director for Equity Swaps Trading and Risk Management, and Director for secured funding and collateral management for the Global Capital Markets Group and Corporate Treasury. Prior to working at Merrill Lynch, within the financial services industry, he worked for County Nat West Securities and Morgan Stanley, where he had international assignments in Tokyo, Hong Kong and London. He began his career working at Price Waterhouse from 1982 to 1984.

Mr. Rothbort received an M.B.A., majoring in Finance and International Business from the Stern School of Business, New York University, in 1992, and a B.Sc. in Economics, majoring in Accounting, from the Wharton School of Business, University of Pennsylvania, in 1982. He is also a graduate of the prestigious Stuyvesant High School in New York City. Mr. Rothbort is married to Layni Horowitz Rothbort, a real estate attorney, and together they have five children.
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