Circuit City (CC) shares hit four-year low: time to buy?

With Circuit City Stores, Inc. (NYSE: CC) flailing in the wind for the last two quarters, the company's shares are sitting in prime takeover territory. Best Buy, Inc. (NYSE: BBY) is not letting up on its death grip yet, and continues to out-sell and out-perform rival Circuit City at every turn. As I mused a few weeks ago, CEO Phil Schoonover may as well put his resume up for a peek. Well, if anyone wants to look at hiring him, anyway.

But, downtrodden times usually bring out the shorters, and of course this is the case with those shorting Circuit City shares right now. Shares in the consumer electronics retailer are already sitting in cherry-picking territory, closing yesterday at under $10 each. Do they have room to go even lower? Based on recent results and the guidance being given for a possibly poor-performing holiday retail season, Circuit City shares may head south even further.

Is it time to get in now? Only if you're into shorting -- or believing that a private equity buyout may soon happen to the retailer (a rumor for quarters now). Shares are sitting at a four-year low as of this week, and the opportunity vultures may be swooping in for several reasons. It's an opportunity with risk, but isn't everything? Almost 33 million shares were held short in September of this year, which comprises 19% of outstanding public shares. What does that tell you? To me, everything.