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5 Companies That Had Better Have New Year’s Resolutions

Ah, the promise of a new year.  And none too soon for the companies on this list. While 2011 was a pretty awful year for almost everyone, it was particularly bad for some.  So, without further

Ah, the promise of a new year.  And none too soon for the companies on this list. While 2011 was a pretty awful year for almost everyone, it was particularly bad for some.  So, without further ado, here are the top five companies glad to see 2011 come to a close.

Research in Motion (RIMM)

It’s hard to imagine a company that had the rug pulled out from under it harder than Research in Motion, but the Blackberry maker saw its future plummet in 2011. There was once a time where the blackberry was so prevalent among businessmen in America that it was renamed the “crackberry,” but a loss of market share brought on by the superior products offered by Apple (AAPL) and T-Mobile came to a head in 2011.  The decline started in March, seriously picked up speed after a June Q2 earnings report revised 2012 guidance lower, and came to a head in October when blackberries around the world went through an outage. In the end, share prices fell over 75 percent in 2011, bottoming out on December 16th when share prices fell to their lowest level since January of 2004.

First Solar (FSLR)

In many ways, the precipitous decline of First Solar in 2011 was indicative of an industry-wide decline. However, as the largest manufacturer of solar panels in the world, Arizona-based First Solar had some of the clearest results (aside from maybe the now-bankrupt Solyndra). A massive increase in supply, driven by an influx of cheaply made solar panels from China, drove down prices and made for tough times for First Solar and other American makers. First Solar ultimately shifted its business model to shift away from government subsidies, but its stock still plummeted 74 percent in 2011.

Alpha Natural Resources (ANR)

Alpha appeared to be poised for a big 2011. A May acquisition of Massey Energy, the controversial coal mining company that brought you the Upper Big Branch Mine disaster, created the second largest coal mining company by market capitalization with reserves of 5.1 billion tons. However, Alpha’s shares went into the tank in late summer, dropping sharply with the rest of the market in early August before continuing the slide into October. On the whole, Alpha lost some 66 percent of its share value in 2011 and is most likely looking forward to a brighter future.

Rovi Corporation (ROVI)

Rovi Corporation, a digital entertainment solutions company based in the United States, was having a down year in 2011 in early November, but not one to write home about. However, a November 8th earnings report changed all that. The company reported a net income of just $1.8 million for Q3 in 2011, down year-over-year some 97 percent from 2010 figure of $36.4 million. Shares plummeted and Rovi ended the year down over 60 percent.

Netflix (NFLX)

Okay, so rehashing the sordid tale of Netflix decline in 2011 has gotten a little old by this point. However, the tragedy that befell Netflix shareholders was positively Shakespearean in its scope (“Et tu, Qwikster?”) so how about going back over the story one last time. It’s summer, Netflix is up, the sun shines, birds chirp, everyone is happy. CEO Reed Hastings announces 60 percent increase in price for combined streaming and DVD services, sky grows cloudy, everyone is mad, customers leave in droves. Reed Hastings, looking to outdo himself, announces plan to spin off DVD service into separate entity called Qwikster, birds fly south, remaining customers are madder still, more leave in droves. Netflix earnings report shows that customers left in droves, no one is surprised.  All told, Hastings’ little stumble ultimately cost Netflix over 60 percent of its share value, a plunge that corresponds to some $12 billion in market capitalization.

Many people think of position size in terms of how many shares they own of a particular stock. But it’s much smarter to think of it in terms of what percentage of your total capital is in a particular stock.