New Money

Zombie Companies: Nightmare on Wall Street

February 26, 2009 RSS Feed Print

A curious investing buzzword (or buzz term) has been popping up on blogs and in the news lately: Zombie companies. Bernanke even used the word "zombie" yesterday in front of the Senate Banking Committee when he refuted charges that Citigroup and Bank of America--both candidates for nationalization--are "zombie banks," meaning they're essentially insolvent, according to the Washington Times.

Zombie companies are like animated corpses: they generate little or no profit for shareholders over extended periods and their shares are pretty much worthless. "They're just there," as Turner Investment Partners chief investment officer told MarketBeat.

For a better idea, check out the blog's frightful list of zombie candidates. They include AIG and E.W. Scripps.

Tags:: investing

« Previous Post Next Post »

Reader Comments Read all comments (3)

Add Your Thoughts Comment Name State Email

Please enter the two words below into the text field underneath the image.

Your comment will be posted immediately, unless it is spam or contains profanity. For more information, please see our Comments FAQ.

When the banking and financial crisis hit the Japanese nation back in the 1990's. The term used for the bail-outs of their financial institutions by the government was the term created and coined "zombie banks". Their equivalent to the Dow was near 30,000 and is now around 7230. You have to wonder how low our Dow will continue to freefall from the high it once had of 14,000 and how long it will take to recover with the presiding person in the white house. Especially since he is doing the same things the Japanese did to themselves.
You know the phrase, those that don't learn from history are doomed to repeat it is sure being played out in front of our eyes.
Let's see who the democrats (aka.socialists) will blame this time now that the republicans aren't signing their name on the bottom line!

Jeff of WI 3:54AM March 03, 2009

BofA was solvent until they took on the heavy debt load of toxic securities from purchasing Merrill Lynch. As a long time small depositor (over $100K) in BofA, I just want to know what the hell were they thinking? Now, they have become a shell of a bank, and my money is only as good as the FDIC insurance.

Tony Lee of CA 4:47PM February 26, 2009

and zombie boards of directors, we would not have zombie companies. Governance is rather "broken" you know.

Muser of NM 1:58PM February 26, 2009

Zombie Companies: Nightmare on Wall Street

Related Articles

Reader Comments Read all comments (3)

New Money

Subscribe

Editor's Picks