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Posted
Jun 25 2008, 09:15 AM
by
Anthony Mirhaydari
Rating:
For Circuit City and its investors, the last couple years have been nothing but torture. Witness the epic share-price decline of nearly 90% over the past two years. Witness the glimmer of hope brought about by Blockbuster's proposed takeover offer in April, which is backed by Carl Icahn, only to see the market severely discount any chance of it happening. Witness yesterday's anticlimactic shareholders meeting where the biggest news was that activist investor Mark Wattles compared corporate due diligence to canine mating rituals.
Although things are dour, they aren't lacking in excitement: Shares in both Circuit City and Blockbuster have been wildly volatile in heavy trading as investors set the odds and outcomes of a possible pairing of the two struggling brands.
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Posted
Jun 23 2008, 05:41 AM
by
Douglas McIntyre
Filed under: Citigroup, Sprint, Wal-Mart, Intel, AMD, AT&T, Starbucks, Target, Sears, IBM, Circuit City, Sun Microsystems
Rating:
With the trading year almost half over and results from the first quarter out, 24/7 Wall Street has created the latest installment of its Ten Worst Managed Companies In America list. This is a companion piece to the "CEO of the Year" list and "Large Companies that May Disappear" series.
This analysis is based on: 1) one-year and five-year stock performance relative to the major indexes and other companies in the industry, 2) the company's position in its industry both now and over the last five years, 3) whether management made identifiable and critical decisions which hurt the company, 4) a change in the company's relative market strength compared to its competition, and 5) whether the company could have identified mistakes and changed course quickly enough to avoid a catastrophe.
Some readers will think it is not fair to include companies which have had a recent
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Posted
May 09 2008, 10:07 AM
by
Kim Peterson
Rating:
Blockbuster wants to buy Circuit City for $1.3 billion, but just about everyone has chalked up this proposal as ridiculous because Blockbuster doesn't have that kind of cash. Good thing the company has Carl Icahn in its corner. The billionaire investor -- and Blockbuster's largest shareholder -- said he'll buy Circuit City himself if Blockbuster can't cough up enough money for the $1.3 billion deal. With an offer like that on the table, Circuit City has stopped giggling and is starting to seriously think about the deal. It's hired Goldman Sachs to help it explore options. Circuit City reminded everyone today that it hasn't made any decisions yet, but one thing is clear. this electronics chain is in play. And investors couldn't be happier; shares are up 9% today. Blockbuster shares are down slightly.
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Posted
Apr 14 2008, 12:19 PM
by
Kim Peterson
Rating:
Does one loser plus one loser equal a winner? Not in the case of Blockbuster, whose offer to buy Circuit City is being met today with near-universal derision and head-scratching. The video chain, which has been in a losing battle with Netflix, has offered as much as $1.3 billion for Circuit City. That's more than a 50% premium to Circuit City's closing stock price on Friday. Blockbuster wants to combine the companies into a chain that would sell portable devices, DVDs and other content. Circuit City investors are understandably thrilled by the potential marriage. Shares of the company soared 28% today to $4.98. The electronics chain has been exploring sale possibilities, and this kind of premium is attractive. Blockbuster investors, on the other hand, are not happy: shares dropped nearly 11% today to $2.79.
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Posted
Apr 09 2008, 11:08 AM
by
Kim Peterson
Rating:
Walk into the Circuit City in my town, and you'll suddenly get a strange sensation. Look around...you're the only person there. Wait, someone must work here. Hello? Anyone? Then head over to Best Buy, which is packed with customers and ringing up sales.
Why is Circuit City struggling while Best Buy shines? There are many reasons: prices, marketing and sales strategy top the list. Look at the stock prices of the two: Circuit City shares have fallen from nearly $19 a year ago to $4.30 today, while Best Buy shares have stayed in the $40 to $50 range all year.
Circuit City might see some big changes soon. BusinessWeek reports that the retailer may have hired Goldman Sachs to look into sale possibilities. This comes after the company's turnaround plan has failed. Analysts say one of the worst decisions executives made was to fire 3,400 of the most experienced workers and replace them with lower-paid ones, according to Business Week. Customer service went out the window.
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Posted
Mar 07 2008, 11:59 AM
by
Anthony Mirhaydari
Rating:
Best Buy and Circuit City are reeling this week from the loss of their edge over discounters in the minds of high-definition television buyers -- just as total industry sales are beginning to slow. Yesterday's retail numbers showed that more consumers are trading down to price-focused shops for entertainment products, eschewing the better service and selection offered at specialty stores. Wal-Mart, the king of discounters, yesterday reported "extremely strong sales" of flat-panel TVs and home entertainment furniture.
This is a remarkable turn of events for specialty retailers that once had the high end of the business locked up. Vendors like Sony and Panasonic used to sell exclusively through the leading specialty stores to protect their brand image and leverage the service levels these outlets offer. But now, as the big electronics makers are fighting for their own lives, squeezed by low-cost competitors and a slowing consumer, they’ve become a lot less picky about where to sell their wares. At the end of the day, it's about the sales targets.
This backs up the findings of a recent survey by AlixPartners, a consultancy, which showed that U.S. consumers at all levels now rank "low prices as the most important determinant of what and where they buy, eclipsing product quality, customer service, the shopping experience and ease of shopping." In the words of AlixPartners managing director Fred Crawford: "It's a whole new ballgame."
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