Circuit City Stores Inc. (NYSE: CC) seems to be falling into the abyss of no return. Quarter after quarter, the retailer continues to lose money and disappoint the market. Its shares have been hovering below $2 for a while, and yet no suitor has lined up to buy the company after BlockBuster's recent sub-$1 billion pullout. Still, are things that bad for Circuit City that it can't even give the company away?Yes. HBK Investments dropped 754,000 CC shares and flooded the market Wednesday with a decent position of Circuit's public shares. Just a few days ago, competitor Best Buy, Inc. (NYSE: BBY) said that its Q2 profit was dragged down 19% due to the cash needed to roll out its Best Buy Mobile concept to its 1,000 stores in North America. Still, the market didn't like the largest consumer electronics chain reporting a profit slide.
As a result, shares in Circuit City sit at $1.54 this morning, the lowest share price in over five years. In fact, you've earned a healthy -86% if you purchased CC shares in August 2003. Nice investment, yes? Although, let's give the retailer some credit in this year's bear market, but still.
HBK's sellof this week drops its position in the struggling retailer from 9.15% to 8.7%. I am surprised HBK wants to own any of this retailer, but it's probably waiting for another offer so it can sell the remaining shares at a premium. It's pretty sad that a premium on Circuit City's shares would be perhaps $2.50, right?
During a visit to a local Circuit City location this week, there were a total of two customers in the store -- and eight employees. Yes, Circuit City is going places.
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Reader Comments (Page 1 of 1)
9-18-2008 @ 11:56AM
andyg8180 said...
I have no clue what happened to CCity... They used to be THEE place to buy stuff... Ex-Employee of BBY, i can tell you there was never a slow moment at BBY... Except Octobers... But man, CCity, fix your strategy, make your stores more appealing to walk into... Or just close up shop if you cant relate to todays consumer!!
9-18-2008 @ 11:56AM
Henry Postigo said...
I personally never liked the way Circuit City in terms of store is modeled. The red everywhere is just a color that is not good. I guess most comsumers turn to amazon.com or other online retailers for the great thing: NO TAXES! I prefer to wait a bit ( 2 day shipping with Amazon Prime) and I get my movie with no tax. or free shipping if you like to have it later. Best Buy is the only place I go to when I buy maybe a movie and that's when they are selling a movie for 5 dollars. Circuit CIty will be gone from the market eventually if it doesn't restructure and offer lower prices. I feel bad for the people working there who try to earn a modest pay.
9-18-2008 @ 12:20PM
TX CHL Instructor said...
Here's what happened: They fired everybody that was "too old" ( http://www.hrcapitalist.com/2007/11/we-fired-you--.html ), and now they don't have anybody running the stores that has enough experience to know how to do it well. They wanted cheap help, and that's what they got.
And, since I'm too old to work there, I'm certainly too old to shop there. They have competition that isn't quite so blatantly ageist, and I spend my money there instead.
BTW, if you don't believe in age discrimination, it's because you haven't been around long enough.
9-20-2008 @ 1:19AM
Qdude said...
Why this company continues to keep Shoonover as CEO has to be the biggest mystery in American business today. Maybe he's bedding one of the board members? Who knows.
God what a horribly run company.