Every year since 2009, we publish a list of big companies and trouble and predict who will go bankrupt during the year. 5 of the 8 companies in the 2009 article have gone bankrupt along with 5 of the 10 from our 2010 article. In the past two years, the economy was devastated and consumer spending had dropped drastically. However, a rejuvenated market has been emerging in 2011, with the broad economic indicators mostly positive. Market analysts, however, report that the American consumer will never be the same again – a new sense of financial competence and saving have been instilled into many.
So, what’s the big deal about M & A’s anyway?
Mergers & Acquisitions have traditionally been linked to investor confidence in the market, directly leading to more money going into the stock market. M & A activity has been very low since the recession began as CEOs are unwilling to take big risks, instead holding on to cash assets.
So, let’s take a look at some previous cycles of M & A Activity and how they corresponded to the stock market:
In a decade with two gigantic recessions, many executives were faced with difficult decisions. Some saw their companies through the tough times and into a prosperous future, while others… failed. They fell flat into the ground, face first.
From those failures, a few stood out as disasters. Leading healthy corporations, they disappointed investors, shareholders, and the economy. Thousands of large businesses have failed, thousands taken over by more powerful and better managed competitors.
In an attempt to differentiate the bad from the worse, Smarter Spend has dug into the past and brought you the Worst CEOs of the 2000s Decade.
Many of us have considered opening franchises in the past or are actively looking for one to open. Franchising has been around in the United States since the 1850s and there are currently over 1500 franchise-able brands. Approximately 4% of all businesses in the United States are franchises accounting for billions of dollars of sales every year.
There are several advantages to franchising: benefiting from an already successful or tested businesses model, sharing risks with a larger amount of people, technical support for problems, marketing and brand names are already well known, and finally, you are your own boss. These advantages have helped a franchise boom since the 1960s, with the ubiquitous McDonald’s the clear-cut leader in world wide franchises.
Almost one year ago, we predicted, correctly, the inevitable bankruptcy of some large corporations in 2009 (Old Article). As the highly volatile market of 2009 is slowly fading into the “Reconstruction” era model of 2010, consumer spending has slowly been realigned from the “wants” to “needs.” Although confidence has gone up slightly from last year’s holiday season, more and more Americans are finding out that the green linings in their wallet have disappeared.
During the early days of the recession, as stock markets were vacillating between gains and losses, investors had hopes that 2009 would bring about a slow economic recovery as the housing market stabilized. However, two quarters later, with stocks at their lowest levels since the mid 90s and no turnaround in sight, Americans are bracing for what could be a devastating depression. The pain has been felt around the world with 8 members of the European Union pleading for help, loss of jobs all around the world, and a drop in commerce levels.
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