You might argue that much of the retail sector is in one part or another of the screw-up-lie-die sequence, thanks to competition from the Internet. Take Best Buy, which recently announced that it was closing 50 stores. Anyone who has actually been to a Best Buy store would realize that this company is a goner. Its salespeople have no idea what they're doing, and its prices are simply not competitive with what's available on the Internet. Smart consumers use Best Buy's stores as showrooms, examining products and then rushing back home to buy them online.
It's not very nice, but it's precisely the same problem that is plaguing Barnes & Noble, and which pushed Tower Records into bankruptcy. Best Buy is gamely clinging to life, and is talking about employing highly trained salespeople at smaller stores. But common sense tells you that this company is doomed. It may linger for a while, but it isn't going to be pretty.
The same can be said for some Internet companies that are being crushed in the marketplace. That would include Overstock.com, whose business model ceased making sense years ago. It has been plagued by mounting losses that are going to worsen, I suspect, now that the states are pressing for sales tax collection by online firms. Overstock recently announced that the Securities and Exchange Commission had terminated an investigation of its accounting without taking action. But that isn't going to stop the relentless march of screw-up-lie-die.
"It does seem like the Commission is doing the nice thing here since the numbers show that the company is more or less doomed," said accounting sleuth Caleb Newquist in the Going Concern blog.It can take a while for investors to come to their senses when they own shares in companies that don't make sense. Green Mountain shares are well off their highs, but have a long way to go before the inevitable reckoning. That's probably the only silver lining for people who bought into the Groupon IPO -- they're getting their pain in one mercifully quick dose. Gary Weiss's most recent book, AYN RAND NATION: The Hidden Struggle for America's Soul, was published by St. Martin's Press in February.
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