BBY witha new CFO from William Sonoma is a Computer savvy and determined to streamline all BBY's ONLINE operations and move more and more toward online .. as much as 25% within a year. And with price matching, BBY will not be stopped. It will be around $20 when they report Q-4 earnings results and PE will notice that the earnings are steller and will be ready to help Schulze take company private @$24-$26. All shorts lose or cover
Sentiment: Strong Buy
I agree with Vip - the deal will happen and probably at the last minute! If you read carefully what has happened since August 2012, e.g. Schulze leaving his post as chairman without a fight, the development with the board, two key board members leaving, the fully financed "low-ball offer" ready on December 14th, the WSJ announcement a couple of days back, if we put all puzzle pieces together we can easily deduce that the deal is going to happen and that Schulze is more than serious.
I can understand investor's/trader's frustration with the constant delays, but we should actually thank Joly for delaying the inevitable. If you read carefully, we can see it was more the board’s request to postpone a buyout offer by Schulze in December, because they would have blocked the low-ball offer Schulze had CONFIRMED and fully financed. Since Joly was confident that the last quarter would be a success, he has been able to raise the buyout price for all shareholders from 16 to easily $22 per share, if not more ($24-$26).
Again, I doubt the money is the real issue right now as painful as it might be for Schulze. Credit Swiss handed Schulze a “highly confidence” Letter for finance way back in August ($24/26) and that reputable PEs are involved is also officially confirmed. They aren’t in there for nothing. The only reason, why I am not giving it a 100% chance of happening , but only a 90%, is the wildcard of Schulze’s ego. Is he willing to give up/share power at the top of a buyout deal? PEs want to cover their a….s in case something goes wrong. In the end Schulze will give in and share power. In my opinion, his only realistic option to regain control and to get back his position within the company he feels he deserves. Forget about his bluff to bring in a friendly shareholder.
Sorry guys, but dream all you want. Bankers and Investors are NOT going to invest in a sinking ship. All they have to do, is point out Circuit City (which I really liked) bankruptcy and the demise of Barnes and Noble going on. Not to mention lots of other stores that tried this before. I remember Computer City, and Egghead, and they had to completely close down. Egghead went online. Smart move. The profits for Best Buy at their stores, is history. It won't be repeated.
While I am long for this trade, PE already knows what Q4 earnings are, so if they're in.....they're in. It has been well documented that they/and Schultze have access to that info. as we speak. Methinks that's why there will be no bid. It would cost them too much now for the risk. Doesn't change the fact that I still believe the rising pps has to do with relatively good Q4 numbers. On low volume today, filled yesterday's gap nicely and has stayed above 200 DMA. Any minute we could get the announcement that Schultze is out and price will defo. drop quick. I just hope I'm in town to add cuz all the buy volume this year has not imho been on speculation that there's a takeover coming.
Regarding money, I agree with you. Since the Q4 numbers are out, there is no question that calculating the finance necessary and all the projections by PEs for a possible deal is a piece of cake for them - they are Pros - Hence, they could have given us an answer about the deal within the first week of Feb. It must be the issue on "deal power" deciding on management team and restructuring plan they are haggling about.
BG, I think the deal is still on, but probably they are haggling right now. I don't think it has so much to do with the financing in place - I feel it's rather more the management team issue, responsibilities, power influence etc. if sth goes wrong - I guess that Schulze wants the money, but doesn't want to give up any power/influence in this deal - probably a rather stubborn person. The more I think about it I need to change my mind about the leakage. It was probably Schulze's team that leaked the info to WSJ to put pressure on PE's and Inv. Banks in the negotiation process. Message: I will walk away and there will be no deal for you PEs - No fat fees for you - so better give me money - lol.