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Best Buy Co., Inc. Message Board

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  • profitgrowthfirst profitgrowthfirst Oct 25, 2012 3:06 PM Flag

    BBY is a Sucker's Value Trap

    Betting on a buyout is just too dangerous. Think about it critically: What private-equity firm is willing to buy a company that was valued at $12.8 Billion, and has watched its value fall to $6 Billion, and is now guiding profit down again, after they missed on earnings 5 of the last 6 quarters.

    If you were in charge of a PE firm, would you want to pay about $ 7 Billion or $8 Billion (or about $20-$22 per share), which is the lowest they could pay while giving the current shareholders any worthwhile value, when the company's value is crashing from $6 Billion to $5 Billion to below $5 Billion? That means, it will be difficult for Schulz to find a PE firm that is willing to put that kind of money down, which would be necessary to get a deal done.

    Sentiment: Sell

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