When Mark Wattles stepped up his holdings in consumer electronics retailer Circuit City Stores, Inc. (NYSE: CC) last week, shares in the retailer jumped over 33% to $5.04 Tuesday-Wednesday last week. Circuit City's share price has settled back down to $4.74 this morning -- still a gain of over 25% from a week ago close of $3.76. The retailer still is not worth that amount with the current leadership in place.Circuit City is now valued at just over $800 million, which puts the company in prime shape for acquisition. One must ask, though, why private equity was not interested a week ago when the company's market cap was valued under $600 million? That's a little over half a billion for the second-largest consumer electronics chain in the U.S. with nationwide locations. Apparently, not a single entity besides Wattles sees any value here.
Wattles did say that he is considering an outright purchase of the company or a forced leadership change now that he has amassed over 6% of the company's shares. Something -- anything -- needs to shake up Circuit City back into profit reality soon. No other money has come calling, so it may be Wattles's sole call to make. If you're holding on to your CC shares -- and you haven't sold them on fear -- you may soon be rewarded. That is, if you haven't taken profits from the company's wild increase last week.
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Reader Comments (Page 1 of 1)
1-28-2008 @ 6:27PM
say what? said...
Wattles can take a lesson from Eddie Lampert -- buying a dying retailer is not necessarily the road to big profits.