This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

First You Screw Up, Then Lie and Finally Die

Stocks in this article: GRPN

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.

3 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs