Most hated companies 2015: This year, the businesses on our annual "most hated companies" list stole, poisoned, and defrauded their way to profits - and most did so unapologetically.
Here is our list of the most hated companies of 2015...
5 Most Hated Companies of 2015
Most Hated Companies 2015, No. 1: Volkswagen AG (OTCMKTS: VLKAY)
On Sept. 18, the U.S. Environmental Protection Agency (EPA) accused Volkswagen of deliberately rigging 482,000 VW and Audi cars with 2-liter, four-cylinder engines with a "defeat device" to evade Clear Air Act standards. The agency learned that software had been installed into various models allowing them to perform better on emissions when they detected they were being tested.
Two days later, VW admitted to wrongdoing. CEO Martin Winterkorn made a public statement claiming he was "deeply sorry" for violating emissions standards and ordered an external investigation. He resigned just two days after that.
In the wake of the scandal, VW's shares plummeted. Before the scandal broke on Sept. 18, VW stock was $36.31. By Sept. 21, it had fallen 17% to $30.10.
The breadth and audacity of the entire scandal was, itself, rather heinous. But here's what's even more disturbing...
Winterkorn knew about the company's emissions and fuel economy cheating a full year before it became public knowledge, German newspaper Bild am Sonntag alleged on Nov. 30. The newspaper also reported that VW stopped selling the Polo BlueMotion in Europe this past spring because it discovered that its actual fuel economy was 18% below its official rating. At the time, however, VW stated that it pulled the Polo because of "subdued demand." Hush hush.
Most Hated Companies 2015, No. 2: Chipotle Mexican Grill Inc. (NYSE: CMG)
This past July, Chipotle sickened five people in Seattle with E. coli. In August and September, more than 64 cases of salmonella were reported in Minnesota, while more than 100 customers fell ill with a norovirus in California - all linked to the "food with integrity" burrito chain.
Forty-three stores were closed across the nation after agencies reported "repeated food safety violations" upon inspection of various franchises.
While Chipotle CEO Steve Ells did apologize for causing a "burrito plague," he waited at least five months after the first cases came to light before doing so. Prior to his public apology on Dec. 10, a spokesperson for Chipotle, Chris Arnold, repeatedly maintained that customers' well-being was always the highest priority - but would not cop to any fault on the restaurant's part.
It's no wonder Chipotle's brand reputation tanked this year. A report from Jonathan Maze at Nation's Restaurant News on Dec. 17 outlined the results of a YouGov poll that charted Chipotle's rating over 2015. On a "buzz score" scale in which 0 was a neutral rating (with 100 being positive and -100 being negative), Chipotle's came in at a -40. That's way down from the +8 it scored last year, when YouGov also gave Chipotle its "Most Improved Business" award.
Chipotle stock has suffered in kind. Shares in CMG fell from an Aug. 5 high of $757.77 to $499.70 on Dec. 22 - a 44% plunge.
Most Hated Companies 2015, No. 3: Valeant Pharmaceuticals Intl Inc. (NYSE: VRX)
It all started when Democratic leaders in Congress took aim at biotech companies' pricing strategies. Valeant had acquired two commonly used heart drugs, Isuprel and Nitropress, earlier this year, and proceeded to raise prices on the medicines by 525% and 212%, respectively. The increase prompted an investigation by Democratic senator and current presidential hopeful Bernie Sanders of Vermont and Rep. Elijah Cummings of Maryland in August.
On Sept. 28, the two lawmakers sent a letter to the committee's Republican chairman asking him to issue a subpoena that would force Valeant CEO J. Michael Pearson to testify about his company's "massive price increases."
Shares of Valeant tumbled 16.5% from $199.47 to $166.50 that day.
Money Morning Global Credit Strategist Michael Lewitt warned investors on Oct. 4 that VRX was a deeply troubled company - one that was "emblematic of just about everything that's corrupt and toxic in today's markets."
He went on to explain that hedge funds loved Valeant thanks to its practice of buying other drug companies using junk bond financing, firing most of their employees - and then sharply hiking the prices of the drugs to which they'd just acquired the rights.
"That's an ugly business model," Lewitt warned.
Sure enough, on Oct. 22, news broke that the drug company was using specialty pharmacy Philidor, which sells drugs directly to consumers by mail, to inflate its drug sales. Shares of Valeant fell 9% to $109.87 from $118.61 that day.
On Oct. 26, Pearson held a conference call in which he firmly stated that his company had not used Philidor, or any of its affiliated pharmacies, to artificially inflate sales. However, a simultaneous investigation by The Wall Street Journal found that Valeant employees were often involved with the operations at Philidor and used aliases to hide their identities.
While the investigation between Valeant and Philidor is ongoing, what's particularly heinous about the entire scandal lies on Valeant's failure to appropriately disclose certain information to its investors...
You see, VRX purchased an option to buy Philidor in 2014 but didn't disclose that information to stakeholders, claiming that its "under wraps" status would help maintain a competitive edge against rivals.
But the week the news broke that VRX was possibly using Philidor to gouge prices, the corporation's shares dropped 19%. It went from $116.16 to $93.77. As of right now, VRX's share price is $112.46 - down 57% from its Aug. 5 high of $262.52.
Most Hated Companies 2015, No. 4: Comcast Corp. (Nasdaq: CMCSA)
A report released by the American Customer Satisfaction Index on June 2 helps explain perfectly why Comcast is consistently hated among American consumers. In fact, Comcast is our only repeat offender - it also made our "most hated companies" list in 2014.
The survey revealed that customer satisfaction regarding Comcast among all subscription TV and Internet service providers came in dead last. Comcast dropped 10% from its 2014 customer satisfaction score of 64% to 54%. Worse yet, the ACSI data, which is based on 14,176 customer surveys collected in the first quarter 2015, showed that customer satisfaction will likely continue to deteriorate for the nation's largest pay-TV provider. This further decline is a result of poor customer service combined with ever-increasing prices.
What adds to Comcast's "most hated" story this year is that the company began hitting subscribers with overage charges of $10 when they've exceeded their 300GB monthly data caps.
But the company allows customers to exceed these caps three months before they are actually charged the fees, reported ArsTechnica on Dec. 17. Surprise!
As a rebuttal to its secretive punishment, Comcast pointed to research - it commissioned itself - showing that its data metering is usually accurate. But one customer who contacted ArsTechnica was able to prove that he was being incorrectly accused of using excessive data. Comcast apologized and restored three months complimentary service in an area where it's the only viable Internet provider anyway.
Most Hated Companies 2015, No. 5: Martin Shkreli
OK, OK, obviously Martin Shkreli is not a corporation. But the companies associated with this "pharma bro" bad boy all turned to dirt after he came along.
- Take KaloBios Pharmaceuticals Inc. (Nasdaq: KBIO), for example. Shkreli was named as CEO of KaloBios on Nov. 20 after buying 2,075,200 common shares in the company. But then he got arrested last Thursday for securities fraud. The biopharma's stock plummeted 53% to $11.03 from $23.59 that day shortly before being halted before 7 a.m.
- It was Shkreli's company Turing Pharmaceuticals that brought drug-price gouging front and center this past September. It hiked the cost of one drug, Daraprim, by 5,000% - from $13.50 to $750 - overnight. Shkreli has since resigned as CEO of the biotech company. Yesterday, a spokesperson for Turing stated via email that only commercial insurance companies will be paying the full price of Daraprim, reported Forbes.
- And then there's Retrophin - the company Shkreli ran through which he committed securities fraud. He did so by using profits from that company to pay off debts owed by his failed hedge fund, MSMB Capital Management. Bernie Madoff would be proud.
Do you agree (or disagree) with the companies we included in our annual "most hated companies" list? Send us a tweet @moneymorning or leave a comment on our Facebook page.
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