Best Buy shares surge as buyout hopes dim
Founder Richard Schulze is hitting roadblocks in his takeover efforts. But investors don't seem to care.
Richard Schulze can't get enough financing and is also having trouble finding minority investors, Reuters reports. Now, he's trying to line up private equity firms for a non-controlling stake.
Investors seem unfazed by Schulze's stymied efforts. Shares of Best Buy (BBY) have surged nearly 40% this year, as Wall Street bet that CEO Hubert Joly's plan to turn around the company might work.
The company will probably shed more light on the strategy and Schulze's plans when it reports earnings Friday.
Best Buy's "resurgence" needs to be viewed in context. The stock has rallied because its holiday season was better than analysts expected. Same-store sales were flat, which, though an improvement over the decline analysts had forecast, is still pretty dismal. Beating Wall Street expectations is far less impressive when not much is expected in the first place.
Best Buy is a case in point. Wall Street is projecting profit and sales to continue to fall for a while. Joly is slashing expenses, eliminating 400 jobs at corporate headquarters as he tries to make Best Buy more competitive against rivals such as Amazon.com (AMZN). Lurking in the background of this transformation is Schulze, Best Buy's largest shareholder.
Schulze was forced to give up his chairman's role last year after failing to inform the board about an inappropriate relationship involving CEO Brian Dunn and a female employee. Dunn was forced out as well.
As Reuters noted Wednesday, potential investors are still not convinced that investing in Best Buy wouldn't be throwing good money after bad. Whether their skepticism is well-founded may be evident after the latest earnings are released.
--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
- ATM gives out free money
WHO REALLY WANTS BEST BUY DEAD? WHO WILL GAIN THE MOST?
HAVE ANY OF YOU BEEN TO A HHGREG STORE? THEY ARE THE PIYS.
I TOOK BACK EVERYTHING I BOUGHT THERE. WALKING IN THEIR STORES,GREG,IS LIKE WALKING INTO A DIMLY LIT BOX.
SOME OF THEIR PEOPLE TRY TO HELP BUT NA.
SOMEBODY IS DESPERATE TO GET BEST BUY OUT OF THE WAY.
AMAZON DOES NOT ALWAYS HAVE THE BEST DEALS. ALSO,WHO DOES THE WARRANTY WORK FOR AMAZON? AT LEAST WITH BEST BUY YOU CAN TAKE YOUR COMPUTER BACK TO THE STORE FOR WARRANTY WORK. NOT SEND IT BACK.
IT IS THE INTERACTION WITH THE SALES PEOPLE THAT MAKES IT BETTER AT BEST BUY.
AAND NO,I DO NOT WORK FOR THEM.
Our Kitchen God,as we called it for years.....Came from Best B.
It was one of the First Stainless Refrigerators, for residential use we had ever seen..
We had many remarks and compliments for several years..It was unique at the time.
Now many have them, or at least they are seen on TV in Ads..
A Frigidaire Gallery,Professial Series, side by side about 25 c/ft, all the bells and whistles.
A minor problem first few days, BB sent a repairman from someplace, next day fixed quickly.
Never a problem since in about 20 years...Excellent appliance.
Does Amazon do that ???
We had treated ourselves, after owning a 70 year old Hotpoint, bought or given by a relative.
Still got both...Both work well...Hotpoint in the Barn/garage.
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[BRIEFING.COM] S&P futures vs fair value: +3.60. Nasdaq futures vs fair value: +8.70. The S&P 500 futures trade four points above fair value.
Markets in Asia ended on a mostly higher note.
- In economic data:
- Japan's Retail Sales fell 0.6% year-over-year (expected -0.5%, previous -0.4%), while Household Spending dropped 3.0% year-over-year (expected -3.8%, prior -8.0%). Separately, the Unemployment Rate ticked up to 3.7% from 3.5% (consensus ... More
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