Best Buy's wild day
The company's shares are all over the place as investors react to rumors of a major stock sale or a possible buyout.
First, there was news that Schulze was resigning weeks earlier than expected. Schulze, 71, was criticized because he didn't tell the board about allegations that the company's former CEO was having an inappropriate relationship with a female employee. That CEO is now gone, and Schulze was also departing in the scandal.
But wait. Schulze owns 20.1% of the company, and anything he does with that stake is of tremendous interest to shareholders. So there was a little panic Thursday when Schulze issued a statement that said he would "explore all available options" for that stake. Was he going to sell? And what impact would that have on the stock's rock-bottom share price?
"Schulze's share sells would keep the stock price depressed and probably even take it down further," wrote one Seeking Alpha contributor. "This is a sticky situation and this stake sale would be a major negative for shareholders."
You could see the impact of Schulze's statement in morning trading. The stock opened at $19.07 and quickly dropped nearly 5%.
But then another development emerged. The Minneapolis Star Tribune reported that Schulze may try to take Best Buy private with new owners and management. Maybe that's what he meant by exploring options.
Schulze has only been increasing his stake in Best Buy, and picked up another three million shares in March, reports the Star Tribune.
Could he possibly take it private? Would he have that much money? The newspaper reports that Schulze would need to offer investors at least $30 a share, or $12 billion, to seal the deal.
You can imagine what that did to Best Buy's share price. The stock turned up, reversing its losses earlier in the day. It didn't quite match the $19.89 it closed at Wednesday, but it was close.
Volume for the day was a whopping 33 million, far eclipsing the 8.7 million daily average, as traders tried to make sense of all the news.
For now, investors are left hanging on what Schulze will do next. Any decision he makes has the potential to dramatically impact the share price in either direction.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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