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Best Buy Co., Inc. Message Board

  • ceo_john_chambers ceo_john_chambers Feb 14, 2013 3:42 AM Flag

    Did anyone actually read the original article at WSJ?

    Couple of points:

    1. Reputation is by far the largest asset every media has and tries to cherish. And WSJ's reputation has been nothing short of stellar thus far. I as well assume WSJ has a strict criteria concerning sharing market sensitive information from "informed sources" and they would not publish articles based on pure speculation and misrepresentation of facts. That is what I believe.
    2. But please read the original article - actually it is quite neutral and vogue as if it was corrected by WSJ's lawyers before being published.
    "Richard Schulze is weighing whether to scrap a plan to take over the struggling electronics chain..."
    meaning the decision has not been made yet
    3. The price action yesterday was pretty disastrous no doubt about that but look at it closely - BBY fell nearly 10% in just 2 minutes and since reaching 13.80 somebody was buying it heavily.
    I took a look at "bought on weakness" list of yesterday and found that BBY is there.

    Make your own conclusions everybody

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    • "Richard Schulze is weighing whether to scrap a plan to take over the struggling electronics chain..."

      It is not up to Schulze. The banks will not backstop a financing of this size for a company on a negative trend like Best Buy. The banks would wind up holding a massive slug of high-risk bank debt and they have enough capital charge issues as it is. The alternative would be the high yield market, which Best Buy can't afford, and the high yield market would require a massive coupon given lack of covenants and this company's uncertain future.

      I modeled out the LBO shortly after the company released holiday sales. The LBO does not work above $12/share. And I think all the longs on this board would agree a sale at $12 will only be welcomed when the stock is nearing zero.

      Biggest downside for shorts? The company pulls itself from the mire of structural headwinds through pristine operating performance. Until then, lots of volatility, and I'm happy to be short.

      Sentiment: Strong Sell

    • I've said it since last year. NOBODY is going to buy this garbage. One day you will learn the hard way.

 
BBY
35.97+0.17(+0.47%)Aug 28 4:00 PMEDT