What is interesting is that investors are generally considering Barnes & Noble, Inc. (NYSE: BKS) as the only winner in this matter.  Shares are up another 2.5% today at $17.67, but the stock was down at almost $17.00 during Monday’s lows.  Now that Borders is toast, this means more brick and mortar bookstore buyers can still head the way of Barnes & Noble stores to buy books, newspapers, calendars, and other items.  Barnes & Noble still has a market cap of only $1 billion and it is obvious that the outfit does not want to get into that buyout that was around from John Malone.  B&N operates over 1,300 retail stores if you count campuses and its fiscal-2011 sales were roughly $7 billion.

There may actually be another winner that has gone largely overlooked and maybe even unloved.  Books-A-Million Inc. (NASDAQ: BAMM) is a mere $49 million company based in Birmingham, Alabama.  It now operates over 200 sores in 23 states and in D.C. and has been considered the third largest book retailer in America.  Books-A-Million’s sales have been in decline and the most recent year (January 2011) saw sales of roughly $495 million, but it has still managed to remain profitable in each of the last three fiscal years.  It is small enough that it actually has no large firms covering the stock but the earnings for each of the last three years (most recent first) is here: $8.9 million, $13.3 million, and $10.5 million.

Books-A-Million shares are actually about flat today at $3.09 and the 52-week trading range is $3.00 to $7.07.  The stock only trades about 76,000 shares per day.  Our only question is whether or not the company is actually too small to even get noticed.

The real question that will arise is which retail locations actually did well in the Borders’ network.  Some were not losing money and there may be an opportunity for the bookstore rivals to open locations that had failed.

We would note that while Amazon is an obvious winner, this is now just a line-item for a company of its size.

JON C. OGG

Right below Borders on the list are Fannie Mae and Freddie Mac. Federal government officials my shutter both of the mortgage firms after investments from taxpayers to support them soared toward $400 billion.

Note: The Flame Index scans thousands of news sites 24 hours per day and ranks companies getting the most negative press right now. The Flame Index Media Analysis Algorithm crunches the data for an up-to-the-minute ranking of the hardest-hit companies.
The Flame Index started as a research tool in 2008 at the NY Innovation Design Lab (nyidlab). It was used as a general metric to evaluate companies and their risk in the media. Publicly traded Fortune 500 companies are used as a measure to calculate an overall market of negative news and the companies are ranked within that market.

Data and ranking provided by the Flame Index.

The company referred to an environment “of curtailed customer spending” and its ongoing discussions with publishers and other vendor related parties along with its lack of liquidity.  The company does not have the capital needed to remain viable in today’s environment.

The financing was led by General Electric Co. (NYSE: GE) under GE Capital.  The company intends to honor its Borders Rewards program, gift cards and other customer programs, and it also expects to make employee payroll and continue its benefits programs for its employees.

Store closings are coming.  The company noted that it will undertake a strategic Store Reduction Program and it has identified certain underperforming stores that come to about 30% of the national store network.  These will be closed over the next several weeks.  The website and online commerce site Borders.com, will continue to run in normal course.

With stores closing, this may actually have a positive effect for rival booksellers.  Barnes & Noble, Inc. (NYSE: BKS) trades at $18.69 versus a 52-week range of $11.89 to $24.71. The much smaller Books-A-Million Inc. (NASDAQ: BAMM) with a $90 million market cap trades at $5.83 versus a 52-week range of $5.27 to $8.43.  It might seem fair to note that Amazon.com Inc. (NASDAQ: AMZN) would win from this as well, but isn’t it more than obvious that Jeff Bezos might have already been the victor here in book sales?

The Chapter 11 petition was filed in the U.S. Bankruptcy Court, Southern District of New York.  Completion of the DIP financing arrangements is subject to approval of the Bankruptcy Court and the satisfaction of certain conditions provided in the financing commitments received by the company from the lenders providing such financing.

If you owned the common stock, your outcome is likely a tax write-off against your other gains in other stocks.  The common shareholder is likely to walk away with zero as is usually the case in Chapter 11 reorganization of public companies.

Borders closed at $0.23 (or $0.2284) yesterday against a 52-week range of $0.20 to $3.29.  As of its October 30, 2010 balance sheet, the company’s net tangible assets were -$40.8 million.  Where is Freddie Mercury when you need him?  Another one bites the dust.

JON C. OGG

Note: The Flame Index scans thousands of news sites 24 hours per day and ranks companies getting the most negative press right now. The Flame Index Media Analysis Algorithm crunches the data for an up-to-the-minute ranking of the worst companies.

The Flame Index started as a research tool in 2008 at the NY Innovation Design Lab (nyidlab). It was used as a general metric to evaluate companies and their risk in the media. Publicly-traded Fortune 500 companies are used as a measure to calculate an overall market of negative news and the companies are ranked within that market.

-Douglas A. Mcintyre

Data and ranking provided by the Flame Index.

American Water Works Company, Inc. (NYSE: AWK) has so far not really pulled back at all since we named it as one of ten stocks to own for the next decade.  Investors want to own the shares but it hasn’t given an opportunity as the $26.62 price is against the 52-week range of $19.41 to $26.88. The company meets investors this coming Tuesday.

Apple Inc. (NASDAQ: AAPL) was a part of the Barron’s cover story as #1 for “The Most Respected Companies.”  The companies behind it, Amazon.com Inc. (NASDAQ: AMZN) and Berkshire Hathaway Inc. (NYSE: BRK-A).  Speaking of Amazon, Alan Abelson gave the bearish side of the stock of the ecommerce giant.

AT&T Inc. (NYSE: T) is losing customers to Verizon Communications Inc. (NYSE: VZ) probably worse than expected due to the new iPhone launch this last Thursday.   Workers at two different stores locally this weekend during my attempt to upgrade said that over half of the iPhone buys were actually AT&T customer defections who were moving to Verizon.  If that continues, the risks for AT&T may remain higher than some have considered.

Speaking of Berkshire Hathaway Inc. (NYSE: BRK-A), it has its latest holdings due this week.  The latest portfolio had many big changes from the prior quarter and this will set what Buffett holds for 2011.

Big Lots Inc. (NYSE: BIG) was up almost 2% on Friday on expectations that a buyer would emerge as early as this coming week.  Shares went from $34 to $39 on the news that it was up for grabs, and closed out the week at $41.57 with a new 52-week range of $27.82 to $41.59.

Roche said that regulations in the US could harms its results. (Reuters)

Borders Group (NYSE: BGP) may file for bankruptcy soon. (Reuters)

Brent crude hit a 28 month high. (Reuters)

US stocks reached 30 month highs. (Reuters)

Cable TV earnings are likely to help Time Warner (NYSE: TWX) and News Corp (NYSE: NWS) quarterly results. (Reuters)

Amazon.com (NASDAQ: AMZN) will launch a streaming media service. (FT)

Sanofi-Aventis will buy Genzyme (NASDAQ: GENZ) for over $70 and will offer a payout if a drug in trials is successful. (Reuters)

Wall St compensation reached $135 billion in 2010. (WSJ)

Gap (NYSE: GPS) will name a new head of its North American unit. (WSJ)

An improvement in the earnings at Hilton will help Blackstone’s (NYSE: BX) numbers. (WSJ)

Concerns are growing the China will block US technology in favor of solutions made in the People’s Republic. (WSJ)

US car sales rose 15% in January. (WSJ)

Google (NASDAQ: GOOG) said Microsoft (NASDAQ: MSFT) copied its search results with Bing. (WSJ)

Apple Inc (NASDAQ: AAPL) may have rejected a Sony (NYSE: SNE) e-book app. (WSJ)

Cooper prices reached new highs. (WSJ)

Manufacturing activity rose sharply in January. (WSJ)

Healthcare companies have moved ahead to implement heathcare reforms .(WSJ)

Egypt’s economy is under great pressure. (WSJ)

Japan’s exports are helping to offset the value of the yen. (WSJ)

Citigroup (NYSE: C) took control of troubled EMI. (WSJ)

The movement among US companies to use temporary workers will help firms like Manpower. (WSJ)

The DJIA rose above 12,000. (WSJ)

Trepp said mortgage delinquency rates hit 9.34% in January.

China may raise rates again to offset inflation but the action will help the nation’s savers. (NYT)

Sales of large vehicles helped auto company results in January. (NYT)

Comcast (NASDAQ: CMCSA) and Time Warner (NYSE: TWX) will create a streaming service to attack Netflix. (NASDAQ: NFLX) (NYT)

The Federal Reserve now holds more Treasuries than China. (FT)

Amazon.com (NASDAQ: AMZN) will launch a movie streaming service. (FT)

A global PMI study showed a sharp rise in inflation. (FT)

The SEC took $400 million in leases without competitive bidding. (FT)

A huge cyclone has caused the shuttering of more mines in Australia. (Bloomberg)

Toyota Motor (NYSE: TM) sales have come back from the period of huge recalls. (Bloomberg)

EU leaders will make promises to solve the region’s debt crisis. (Bloomberg)

Douglas A. McIntyre

Honda (NYSE: HMC) expects higher profits as its Q3 topped forecasts. (Reuters)

A Florida judge could say that part of the Obama healthcare reforms are unconstitutional. (Reuters)

China banks have gained political power in the nation’s fight against inflation. (Reuters)

European officials will consider changes to the region’s 440 billion euro bailout fund. (FT)

Brent oil is near $100. (Reuters)

The Nikkei hit a one month low on the news from Egypt, oil rallied, the euro was steady, and Middle East market fell. (Reuters)

The next target of WikiLeaks is likely to be large banks. (Reuters)

The FCC has filed a motion in federal court to stop challenges from Verizon (NYSE: VZ) against new internet use rules. (Reuters)

Alpha agreed to buy Massey for $7.1 billion. (Reuters)

TNK may withhold a dividend payment to BP (NYSE: BP).

BP and Rio Tinto (NYSE: RTP) investor are pushing for cash dividends and not M&A. (Sunday Telegraph (The Telegraph)

The Wall Street Journal survey of home prices in the fourth quarter shows that in many regions values are still falling. (WSJ)

Google (NASDAQ: GOOG) has hired software engineers to build applications for Android in the hope of creating more competition for Apple (NASDAQ: AAPL).

Inflation is growing quickly in emerging markets. (WSJ)

Sales of electric cars are tepid. (WSJ)

The Nintendo 3DS will reach the European market in March. (WSJ)

Global trade has increased despite the emergence of some protectionism. (WSJ)

US profits may have had their best full-year gain since 1999. (WSJ)

Mobile apps have begun to pull shoppers into retail outlets. (WSJ)

Hearst will buy Lagardere magazines for $850 million. (WSJ)

Borders Group (NYSE: BGP) may delay January vendor payments. (WSJ)

China will allow banks to make currency swaps for corporate clients. (WSJ)

The Fed’s holding in long term Treasuries topped $1 trillion. (WSJ)

Inflation in China may limit the US trade deficit as the price of exports from the People’s Republic rise. (NYT)

Losses at Afghanistan banks could top $900 billion partly due to fraud. (NYT)

Trade tensions between China and Brazil have begun to rise. (FT)

The health of European banks has begun to improve. (FT)

Europe banks stocks are rising despite trouble in the region. (Bloomberg)

Douglas A. McIntyre

Ford Motor’s (NYSE: F) annual profit may be its largest since 2000 (Reuters)

Bank of America (NYSE: BAC) may pay a higher percent of its bonuses in cash (WSJ)

Oil fell on weak economic data and signs that OPEC output may be up (Reuters)

Sales of Microsoft (NASDAQ: MSFT) Windows were weak due to slow PC sales (Reuters)

IDC says that Apple (NASDAQ: AAPL), Research In Motion (NASDAQ: RIMM) and China’s ZTE posted strong cellphone sales last quarter (Reuters)

LinkedIn’s IPO will test the public market interest in social networks (Reuters)

Sara Lee (NYSE: SLE) plans to split itself into coffee and meat companies in a tax-free distribution (Reuters)

India’s Infosys is seeking M&A prospects (Reuters)

Hedge fund manager John Paulson made a $5 billion profit last year (WSJ)

Amazon’s (NASDAQ: AMZN) costs hurt fourth quarter profits, disappointing investors (WSJ)

Lawyers with clients who have sued BP  plc(NYSE: BP) have told many of them to settle with the $20 billion fund set up for compensation (WSJ)

Microsoft (NASDAQ: MSFT) sales were helped by the Kinect (WSJ)

The Financial Crisis Inquiry report says that 13 large financial firms were close to failure at the beginning of the credit crisis in 2008. About 50 hedge funds tried to profit from their woes  (WSJ)

The video and music services of retailers including Best Buy (NASDAQ: BBY) Sears (NASDAQ: SHLD) and Wal-Mart Stores (NYSE: WMT) have made little progress (WSJ)

Borders Group (NYSE: BGP) has set up funds for a possible bankruptcy (WSJ)

Caterpillar (NYSE: CAT) said its sales in the developing world have become critically important (WSJ)

Sony (NYSE: SNE) released it NGP portable handheld game device (WSJ)

Euro-zone nations said they would make access to the bailout fund more liberal (WSJ)

Citigroup (NYSE: C) will try to find a buyer for EMI (WSJ)

GM (NYSE: GM) ended its request for $14.4 billion in loans from the Department of Energy. The money was to be used to make its cars more fuel-efficient (WSJ)

P&G (NYSE: PG) sales margins have shrunk due to rising costs of goods (WSJ)

AT&T’s (NYSE: T) growth slowed despite Apple (NASDAQ: AAPL) iPhone sales. (WSJ)

The head of Nokia (NYSE: NOK) suggested he may restructure the company after poor earnings (WSJ)

The US approved the sale of genetically modified Alfalfa (NYT)

Governments have begun to stockpile food to quell concerns about lack of supply and inflation (FT)

Angela Merkel and the head of Deutsche Bank fought over how to handle the European financial crisis (Bloomberg)

Moody’s (NYSE: MDO) said it may have to put a “negative” outlook on the US Aaa debt rating (Bloomberg)

Lenovo will launch LePads and LePhones to counter Apple’s advances in tablets and smartphones (Bloomberg)

Douglas A. McIntyre

When things go well, as they did in the cases of Apple Computer Inc. (NASDAQ: AAPL) and Ford Motor Co. (NYSE:F), they can go spectacularly well. These happy endings, however, are rare.   Turning around failing companies is one of the hardest things for any executive to do.

Here is our list of 9 corporate turnarounds that have yet to turn around:

1. Borders Group

Borders Group Inc. (NYSE: BGP) may have a financial white knight,  or it may not.  Reports were out late last week that GE’s finance arm held talks about providing a financial lifeline.  Then came word that Borders hired restructuring lawyers.  It recently began delaying payments to vendors to conserve cash.  Let’s pretend that Borders does get a last-ditch financing pact and that it gets its debt refinanced.  What really changes?  Borders has faced eroding sales and the last sales gain for a year was in calendar 2006 (fiscal year ending Feb. 3, 2007).  The new figure was down roughly 30% by even a year ago since then.  Borders just trimmed 45 jobs at the corporate headquarters in Michigan and that is on the heels of a fresh plan to close a Tennessee distribution center to cut 310 more jobs.

Borders is now a penny stock and its market cap is a mere $64 million.  With shares back under the $1.00 mark, a delisting notice is a risk and more problems may be coming its way.  For some reason, the Fahrenheit 451 analogy keeps coming to mind.

[24/7 Wall St.'s Free eLetter - analyst upgrades, downgrades, day trader alerts, dividend trends, IPOs, M&A, and Buffet watch.]

2. Boston Scientific

Boston Scientific Corporation (NYSE: BSX) is one that we (and many others) keep thinking will make a comeback.  The medical device maker has been riddled with device issues and recalls.  Its prior 3-year run of roughly $8 billion in revenues is expected to fall to $7.79 billion in 2010 and $7.91 billion in 2011, according to Thomson Reuters.  The only saving grace is that the earnings estimates of $0.39 EPS for 2010 and $0.43 EPS for 2011.  We see little risk to an implosion here, but the company is lost in space.

Competition from Johnson & Johnson (NYSE: JNJ), Medtronic (NYSE: MDT), St. Jude Medical (NYSE: STJ) is fierce, and its acquisition of Guidant for almost $27 billion has never really paid off despite Abbott Laboratories (NYSE: ABT) participating in that merger. At $7.33, shares are less than half and then some since its Guidant deal was completed.

Forecasts from Intel (NASDAQ: INTC) helped combat fears that the company would be hurt by the rise in portable device sales (Reuters)

China is unlikely to agree to appreciation in the value of the yuan at upcoming Washington summits (Reuters)

Google (NASDAQ: GOOG) has put together plans to revive its growth in China (Reuters)

Apple’s (NASDAQ: AAPL) holiday sales and earnings are expected to be spectacular (Reuters)

Video game sales slowed in 2010 despite the success of the Microsoft (NASDAQ: MSFT) Kinect. The industry raised hopes for next year (Reuters)

Federal regulators may challenge a deal by Google to buy travel software company ITA (Reuters)

Sanofi-Aventis hopes to buy Genzyme (NASDAQ: GENZ) for $76 a share (Le Figaro)

Target (NYSE: TGT) may sell part of its credit card assets for $6.7 billion (Reuters)

Trouble in the municipal bond business may hurt chance of hospitals and cities to refinance debt (WSJ)

Hedge funds are making more of the same trade which could destabilize the market (WSJ)

The SEC is considering whether US banks including Citigroup (NYSE: C) and Blackstone (NYSE: BX) paid bride to get business from sovereign wealth funds (WSJ)

Economists polled by The Wall Street Journal are optimistic about growth next year (WSJ)

Brazil stepped in to slow the rise of the value of its currency (WSJ)

News Corp (NYSE: NWS) delay the launch of its product The Daily which is to be done with Apple (NASDAQ: AAPL)

Toyota Motor (NYSE: TM) hopes to build hybrids without earth metals from China (WSJ)

Negotiation to cut corporate taxes have begun to be more active (WSJ)

There are split among German politicians about an increase in the EU bailout fund (WSJ)

The ECB warned that inflation may be rising in Europe (WSJ)

Target will expand into Canada (WSJ)

Merck (NYSE: MRK) ended the trial of a major heart drug (WSJ)

Media companies are concerned that the NBCU deal with Comcast (NASDAQ: CMCSA) could hurt their online expansion (WSJ)

Starbucks (NASDAQ: SBUX) plans to enter India (WSJ)

The war for wireless customers in Africa has heated up (WSJ)

Sterling Bancshares has put itself up for sales (WSJ)

Moody’s and S&P warned the US on its AAA rating (WSJ)

The euro rose on relief about EU debt (WSJ)

Banks will raise dividends after a three year break (NYT)

Groupon will set an IPO to value the company at $15 billion (NYT)

Borders Group (NYSE: BGP) may get new financing (NYT)

Geithner questioned whether a bank crisis can be forecast despite past experiences (FT)

GE (NYSE: GE) has increased its push into energy (FT)

The IMF says that Europe has not dispelled concerns about a debt crisis (Bloomberg)

Douglas A. McIntyre