It is January 10, and I still have not made it to the gym this year. In the least surprising news ever, my New Year’s resolution is not going well so far. While I may be struggling to make those promised changes, that does not mean 2017 will be a stagnant year. In fact, this year is shaping up to be busy one.
President-elect Donald Trump takes office this month, and like him or not, his administration promises to be unique at the very least. On top of that, we get another episodic Star Wars film at the end of the year, people keep saying Daft Punk might tour, and I’m sure we will get a plethora of new stories that will outshine the craziness of 2016.
While this is all fun to think about, 2017 also needs to be a year of change for several major companies. Some businesses need to get back on track, some need to stop the bleeding, and some need to give it up and find a buyer.
Besides the fact that takeover rumors are a personal favorite of mind, it is also important for investors to keep an eye on companies that are on the brink of a sale. Check out these three companies that should look for a suitor this year:
1. Twitter (TWTR)
Oh look, another Twitter buyout suggestion. We all get it at this point, right? Things simply are not working at Twitter and the company is quickly becoming the laughing stock of the technology world.
TWTR has shed nearly 14% over the past 52 weeks, membership growth has remained stagnant, investments in sports livestreaming are not paying off, and CEO Jack Dorsey’s turnaround plan seems to be going nowhere. What’s worse is that the company seemingly cannot find an interested buyer.
Over the past few months, companies like Disney DIS, Salesforce CRM, and Alphabet GOOGL have all been linked to Twitter. Each had a varying level of interest, and each distanced itself from the rumors shortly thereafter.
The latest business supposedly interested in Twitter is Japan’s SoftBank SFTBY, and at this point, investors are ready for any changes. Perhaps a firm could buy the company out and take it private again to ease the pressure.
2. Sears Holdings Corporation (SHLD)
When was the last time you stepped in a Sears store? How about a Kmart? The fact that a significant portion of people reading those two questions honestly don’t know the answer is the big problem here.
Sears was once the pinnacle of American retail. The company innovated the catalog system of ordering and became a staple in nearly every mall in the country. With its Craftsman line of tools, Sears became a hardware and home goods behemoth.
Oh how the mighty have fallen. Over the past decade, revenues have been chopped in half, leaving profits as nonexistent as customers at a Sears store. Over the past three years, Sears has burned about $1.7 billion of cash annually.
Unfortunately, Sears has done the best it could to make itself unattractive to a potential buyer. The company has a mountain of debt owed to its own CEO’s investment fund, and its biggest moneymakers over the past few years have been sales of its best real estate.
Sears also struck a deal with Stanley Black & Decker SWK for the rights to sell the Craftsman brand outside of Sears-affiliated stores. While Sears will continue to produce and sell its own Craftsman products in Sears and Kmart stores, Stanley Black & Decker has basically bought out the brand’s growth opportunity.
With no cash and nothing interesting to sell, Sears might be best served focusing on real estate. Perhaps this company could bumbling company could be bought out and transformed into a REIT.
3. Pandora (P)
At times I feel bad for Pandora. This company became the biggest name in online radio and was immediately drowned out by alternative forms of music streaming. I’m no longer interested in its once-unique curated stations when the deeper libraries of Spotify and Apple Music now do the same thing.
Although Pandora has been working on loosening the limitations that sent listeners to different platforms, it may be too little too late now. The company seemingly understands this and has recently discussed being open to selling itself.
Last summer, it was reported that SiriusXm SIRI majority-owner Liberty Media LMCA was interested in buying out Pandora for $15 a share. Takeover talks picked back up in December when Pandora said it was finally open to a SiriusXm deal, but the satellite radio company has recently downplayed its interest.
Personally, I could see someone like Spotify being interested in this somewhat-competitor, but Pandora should really be looking for any potential buyers before it gets left in the dust of a quickly changing music industry.
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Walt Disney Company (The) (DIS): Free Stock Analysis Report
Sirius XM Holdings Inc. (SIRI): Free Stock Analysis Report
Salesforce.com Inc (CRM): Free Stock Analysis Report
Stanley Black & Decker, Inc. (SWK): Free Stock Analysis Report
Liberty Media Corporation (LMCA): Free Stock Analysis Report
Pandora Media, Inc. (P): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
Softbank Corp. (SFTBY): Free Stock Analysis Report
Twitter, Inc. (TWTR): Free Stock Analysis Report
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