Stock prices usually are considered a proxy for a company’s future. This is particularly true for public corporations that trade large numbers of shares a day. The movement in a stock price of heavily traded stocks becomes a vote of sorts about the company’s progress every day.
It is not unusual for corporate share prices to drop, perhaps sharply, on bad news or when markets are plunging. Amazon.com is one of the most well-run and well-positioned businesses in America. Its stock has sold off, which means investors believe some of its prospects have eroded. But shares are still up 300% in the past five years.
Some public corporations have stocks that have sold down 60% or more in the past year or two. In almost all cases, these companies are in very deep trouble, and in some cases they may not survive. Investors have watched the worst of this kind of stock plunge happen recently with Sears Holdings, which had a breathtaking drop for two years and then filed for Chapter 11. Many of the companies on this list do not have the level of problem that Sears had, but each is likely to have an ongoing and harmful erosion of its core business.
24/7 Wall St. reviewed stocks and singled out nine for which a plunge in share is for all practical purposes a sign that a business is well on its way toward failing.
GoPro Inc. (NASDAQ: GPRO) was in trouble long before the holiday season. Then investors pushed the stock down sharply, because the company said that sales at the end of the year would be poor. As is the case with most consumer electronics companies, holiday sales are essential to success. GoPro’s business model always has been weak. It action video cameras have an army of competition, led by the Apple iPhone and similar smartphones from a number of very large global companies like Samsung. Shares of GoPro were last seen trading at $4.74, in a 52-week range of $4.00 to $7.60. So far, the stock has dropped about 40% in the past 52 weeks.
J.C. Penney Co. Inc. (NYSE: JCP) being in trouble is nothing new for anyone who has watched this stock over the past decade. While most stocks pushed higher over this time, in what was an incredible 10-year bull market, J.C. Penney found a way to hit penny stock status. Even though retail stocks definitely have felt the sting of Amazon, this retailer seems to be suffering a worse fate, a failed business model. The company has been closing stores left and right and has liquidated its property to stay afloat as well. Shares of J.C. Penney were trading at $1.24, in a 52-week range of $0.92 to $4.75. In the past year, this stock has fallen roughly 70%.
Ford Motor Co. (NYSE: F) is facing problems on multiple fronts. First, with the auto industry moving toward more autonomous and electric vehicles, Ford is forced to either sink or swim to deal with the changing market. Unfortunately, it’s been sinking, with Ford stock down about 36% in the past 52 weeks. This is also the result of Ford’s sales shrinking. Most recently, Ford reported that its December sales had dropped roughly 9% year over year, while its full-year sales were down 3.5%. This leaves many tough questions for this automaker to answer going forward. Shares of Ford were trading at $8.35, in a 52-week range of $7.41 to $13.48.
Fitbit Inc. (NYSE: FIT) has had a rough go of things since it debuted in the market in 2015. Shares reached as high as $47 just a few years ago. Now they are a fraction of that price. Huge wearables competitors, like Apple or Alphabet, have dominated the market, leaving little room for Fitbit to sell its products. Although Fitbit has seen a strong start to 2019, a longer look at the chart would suggest that it is not out of the woods yet and there are still more challenges to face. Shares of Fitbit traded at $5.54, in a 52-week range of $4.23 to $7.79. In the past year, the stock is down 11%.