Best Buy, Inc. (NYSE: BBY) shares were upgraded this week based on the likely bankruptcy of consumer electronics competitor Circuit City Stores, Inc. (NYSE: CC). In fact, analyst Bradley B. Thomas stated that, "We believe a Circuit City bankruptcy has become a question of 'when' rather than 'if'."Circuit City, which recently fired its CEO after years of incredibly subpar performance and absolutely dismal results, isn't going anywhere right now. It's not even drawing interest from potential suitors. When you can't find a buyer, you know there's trouble brewing (even before the financial system went berserk in September). Big trouble. The company is looking at "strategic alternatives" to its business, which have to include declaring bankruptcy.
Thomas' assessment of Best Buy takes into consideration the weakness in the consumer economy and the impending bad retail holiday season, but Circuit City's situation could be more powerful than either of those factors. He also points to the fact that BBY shares have dropped 45% in just over a month, making it an attractive buy given Circuit City's weakness. If the consumer electronics industry in the U.S. has one large competitor after Circuit City folds up shop, it will be in prime position. And that position will be held by Best Buy.
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Reader Comments (Page 1 of 1)
10-15-2008 @ 10:54AM
GORDON DAVIS said...
CC THE ANSWER TO SAVING YOURSELF STARES YOU IN THE FACE. GET RID OF ALL OLD CC MEMBERS FROM THE BOARD. SELL YOUR CO TO SOMEONE WHO IS A LEADER AND NOT A FOLLOWER IN THE INDUSTRY.
YOU GOT GREEDY AT THE EXPENSE OF YOUR EMPLOYEES. I STILL REMEMBER WHEN ALLAN MCCOLLOUGH TOLD ME TO MY FACE, WHEN I ASKED HIM " HOW DO YOU TELL AN EMPLOYEE WHO DOES EVERYTHING ASKED OF HIM AND WHO IS AT THE TOP OF THE PAY SCALE, THAT THEY WILL NEVER RECEIVE A SALLARY INCREASE. HIS RESPONSE 12.00 IS A GOOD WAGE.
THEN I'M TOLD BY MANAGEMENT TO BUILD A PAPER TRAIL AND GET RID OF UPPER HOURLY EMPLOYEES.
THEN I SAW THE SALARY INCREASE HE AND OTHER UPPER MANAGEMENT GOT AND BONUSES TO BOOT.
MADE SENSE TO ME
10-15-2008 @ 6:58AM
al coholic said...
Most price conscious consumers deserted Best Buy long ago. They are no longer price competitive. These days Best Buy's customers fall into the "I'm too lazy to get a better price" category.
10-20-2008 @ 1:22AM
ben said...
actually best buy will price match anyone on the market you just have to ask for it. Now who is lazy