Some of the worst business decisions ever made

Updated the listing to include new mistakes in our list of worst business decisions

  • Virgin Australia collapses under administration after denied bailout (added on 24 April 2020)
  • Berkshire Hathway selling Disney early costing $16 billion (added on 24 April 2020)
  • AOL and Time Warner Cable Merger
  • Excite Rejection to buy Google 
  • Decca declining the Beatles
  • Blockbuster rejection to Netflix

  • These are famous lousy business decisions in the history of the modern market. So these are only a little fraction of the famous bad business decisions in history and there is a lot to go on and on. We will share why these decisions are so bad.

    Virgin Australia collapses under administration after denied bailout (added on 24 April 2020)

    https://www.straitstimes.com/business/companies-markets/denied-a-bailout-virgin-australia-a-warning-for-other-airlines

    Airlines are known to be capital intensive investments with little returns for its shareholders. However, the eventual collapse of Virgin Australia after being denied bailout show how countries can choose to let them failed, unlike banks.

    The surprising news from the collapse is the unusual ownership of the company. The carrier had four foreign aviation groups - SIA, Etihad Airways, HNA Group, and Nanshan Group, each holding stakes of about 20% while Mr.Richard Branson's Virgin Group owns about 10%. The ownership of your competitor sounds so odd and it is interesting to see how the companies try to write off the losses and the plans of the new owner.

    Berkshire Hathway selling Disney early costing $16 billion (added on 24 April 2020)

    https://www.fool.com/investing/2019/08/27/warren-buffetts-biggest-blunder-has-now-cost-him-1.aspx

    Although Mr. Buffett managed that he regretted not buying Amazon earlier, Disney was another stock that probably grew beyond his expectations. In 1966, Disney was only valued at $80 million and Berkshire took a 5% stake ($4 million) in it after a meeting. 

    Berkshire sold the share in 1967 for $6 million, making a 50% profit in just a year. However in 2020, even after the panic sell-off, Disney stock is worth over $180 billion, making it 225,000% over the initial $80 million in 54 years. 

    Nevertheless, when annualized, Mr. Buffett had the better deal. Holding Disney until 2020 only earn a 15.37% compounded annual growth compared to a 50% profit in a year. But a 15.37% compounded annual growth over 54 years is something everyone still wants.

    AOL and Time Warner cable merger

    in the year 2000 America online limited merged with the company of time Warner cable and as it was the biggest merger in the business history at that time being was also valued over at almost 400 billion US dollars as the companies are now worth less than 10% of what they were going to deal with it and that are also separated. In many business school lessons and daily courses in the academic section this is currently taught in the business schools as one of the worst deal in the history of business mergers and also apparently and accounting scandal existing surrounding the actual inflation of the America online limited advertising budget that started to begin the unraveling of the fact and along with it it was further decreased just because the companies did not get along at the end of the deal and also the largest reported loss of an investor is the amount of 8 billion dollars.


    Excite Rejection to buy Google in less than one million USD

    Excite HQ

    Back in 1999, the famous search engine at that current time was Excite, which was one of the highly well-known brands over the internet at that time and also was considered as the giant of this market had eventually turned down the opportunity to purchase the company of Google for only $750,000, later on, Google went on dominating the world of the internet market and now are currently valued at more than 800 billion US dollar while the previous company was bought out by another person for only 343 million in 2004. Google is now so much popular in modern times when people are talking about something to be searched on the internet instead of saying search, people now say Google it.

    Eventual Search

    The previous company that was considered as one of the largest faces on the internet hand the decision from the so which was offered firstly of 1 million to purchase the company of Google but later on the price was dropped up to 750,000 only. But eventually, it was rejected by the CEO and as in a general sense, nothing could surpass the weather Google is currently dominating the internet world and also has begun the overall dominance over the cell phone and smartphone industry.


    Decca declining the Beatles

    Decca

    This famous recording company rejected back in 1964 by the famous band of today and also considered as one of the best and most popular bands of all time The Beatles. Beatles are currently the biggest selling band of all time and still yet to be defeated and also it has sold more than one 78 million records and still counting and while on the other hand at when the offer of the chance to sign them before the making of the big entry and the total big launch of their lifetime

    Decca records turn the Beatles down as saying that a band with four-person at the front with the guitar is not just going to work out in the long run as there going to be nothing but a failure in the future.

    Beatles


    Blockbuster rejection to Netflix

    Back in the 80s blockbuster was, also and an unconsiderable competitor towards anything else, the biggest face on the market of multimedia movies for anyone. But Netflix was held onto that title since the late 90s when they first started to make their DVD by mail service towards the market and also one blockbuster was at the highest level their annual review was almost 6 billion dollars but in 2000 the Netflix new that blockbuster was the biggest name in the movie rentals and also attempted to strike a deal with them that would have cost blockbuster only 50 million a price. That they were not comfortable at the time.

    After particular just laughing out of the Netflix executives from the office of CEO of Blockbuster it was not so much later that Blockbuster was filed for bankruptcy in 2010 and already finished closing the doors on the retail locations and also the copyright of DVD by mail service back in 2013 while at that same time Netflix was already valued over 30 billion US dollar. 

    Conclusion

    Bad decisions can happen to everyone and anyone as it is a natural part of life and also they can cost the people behind the total procedure a lot of time or even their relationships along with the higher level of opportunities and also in the following cases a lot of money and also at the time of these decisions were made there was not a lot of ways to predict the consequences that are coming after them.

    However, this is also the part of the responsibility that of being a business-minded person. These choices caused the company's load of money and also it resulted in job loss or even bankruptcy towards the company’s future as they are still feeling the aftershocks of these types of mistakes all these years later. 

    In the market of business legacies and also the giants of the business of international policies that we know as of today and of modern times, among those giants or also from those who are quite successful and even from those who could have been one of the largest faces is in the market of socio-economic companies have also their own set of bad decisions that changed their entire business policy and companies future in totally the opposite way that they could have gone.

    Some manage to recover or to get another policy or walk in another and the new part that brought them success but in most scenario, it is likely to happen and has already happened that those company which would have one of the biggest hits in today’s market have gone missing just like another person in the crowd.


    Efforts have been made to get the information as accurate and updated as possible. If you found any incorrect information with credible source, please send it via the contact us form
    Author
    Sky Hoon
    Website Builder. He has a Bachelor Degree in Computer Science and loved to use technology to solve the world's issue, one at a time. For now, trying to blog for a living.
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