Best Buy: The smart side of a dumb idea

Founder Richard Schulze's bid to take the company private is utterly stupid, but it's a great gift that shareholders should accept.

By Jim Cramer Aug 7, 2012 10:05AM

Sold to you!

Shareholders of beleaguered Best Buy (BBY) just got the gift of a lifetime, a $24-$26 bid from company founder Richard Schulze, and they should take the money.

While I would not doubt the 71-year-old founder's resolve or question the utter stupidity of giving Linens 'n Things -- oops, I meant Circuit City; sorry, I meant Radio Shack (RSH); darn it, let me get this right . . .  Best Buy -- billions to go private, I just want to say that this is about as stupid an idea as I have seen come down the pike for years.

You see, similar to the founding fathers, we hold these truths to be self-evident that some groups are indeed in secular decline -- e.g., newspapers, magazines and large electronic equipment showroom retailers.

While there could be some last-man-standing game going on -- meaning that there is always someone who needs something today with full sales tax and no delivery versus someone who can wait a couple of days for a lower price, no sales tax and home delivery through Amazon (AMZN) -- I don't want to invest in that business.

Schulze, I am sure, sees how much better Best Buy is than the other guys, knows that it still has a humongous amount of sales -- go compare Amazon's sales to Best Buy's; you won't believe how big Best Buy is -- that doesn't mean he can fix it up in a few years and then bring it public again, which is pretty much what the people he is borrowing the money from will demand.

Here's the good news for the market, though. The fact that he is confident enough to try to get this done, the fact that he can say with a straight face that he has bankers who want to help him, the fact that he does have founder's credibility and the fact that he is being taken seriously in the marketplace all tell me that perhaps this stock market is better than we think!

Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust and has no positions in stocks mentioned.

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Aug 7, 2012 11:38AM

when i watch the ticker on cnbc in the morning it is a pleasure not to have to mute this ranting idiot.

every time he isn't on i have hope that he won't return.

Aug 7, 2012 1:49PM
Cramer is the same loud mouth guy who said to sell P&G @ 60. One of many wrong calls. He's dangerous to one's wealth.
Aug 7, 2012 12:58PM

he just licked the CEO of AMT on his show and sure enough AMT is down in an up market.


Aug 7, 2012 11:25PM

the ranting and raving of cramer continues.  I agree, he even seems to have a rational arguement, but the cramer who cryed wolf must not be trusted, if i had some spare cash i would buy me some best buy just to be against this blowhard. 

Aug 7, 2012 3:20PM
Yo Cramer screw you! Remember SEARs you have tatted on your fingers? If the OWNER wants out of this socialized place they call wall street , why not !! Wall street has NOT been running on any sound principals for over 8 yrs ! When best buy goes private it will be the bond holders that will profit real good ! Not STUPID shareholders ! < SCREW THEM... Its like Chrysler today? All the screw balls they call investors want in on this now ? LOL They are making money hand over fist and the bond holders who invested in Chrysler to pay off the two governments off ! YOU KNOW Canada and the USA shyster governments who was untill paid off was sucking 3 million a week from Chrysler REMEMBER??? And if you think Sergio will ever come out with an IPO ? LOL NO WAY untill wall street goes back to sound investing principals ! Otherwise screw wall street! And smart CEOs like Sergio will never give wall street a dime to stupid shareholders! And thats a great thing! GM should have NEVER went public! Look at how wall street treats them today! GM stock should be at least 50$ a share ! But wall street hates American auto companies! And it shows !
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