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Best Buy falls on category-sales news, bid talk

NEW YORK (AP) -- The stock of Best Buy Co. Inc. fell on Tuesday after a research group said consumer-electronics sales in general fell on Black Friday. Separately, The Wall Street Journal reported that a private equity firm reportedly considering backing a potential bid for Best Buy might be looking elsewhere.

THE SPARK: Though neither of those reports are specific to Best Buy's results, they both raise uncertainty about Best Buy's future.

Consumer-electronics revenue fell 5.6 percent on Black Friday, the busy shopping day after Thanksgiving, according to research group NPD's weekly tracking service. Stephen Baker, vice president of industry analysis at NPD, said the slow start to the holiday shopping season is just a continuation of the challenges consumer electronics are facing. Higher tablet and smartphone sales have been offset by weakness in TVs and laptop revenue.

"In an unbalanced market, where just a few categories deliver significant dollars, and even fewer offer any growth, the ability to deliver positive results will remain difficult for companies exposed to the entire consumer electronics marketplace," he said in a statement.

Meanwhile, The Wall Street Journal reported that Cerberus Capital Management is in talks to join a bid for U.S. brokerage Knight Capital Group Inc. The newspaper cited people familiar with discussions.

While unconfirmed, Cerberus has also been mentioned in media reports as a possible backer of Best Buy co-founder Richard Schulz' possible bid for Best Buy. If Cerberus instead joins the Knight Capital bid, it makes the possibility of Schulz' bid more uncertain.

Cerberus did not respond to a request for comment. Best Buy declined to comment.

THE BIG PICTURE: Best Buy has been struggling to maintain market share in the face of tough competition from discounters and online retailers. In its most recent third quarter, it recorded a loss due to restructuring charges and continued weak sales.

SHARE ACTION: Shares fell 70 cents, or 5.5 percent, to $12.22 in late trading. The stock has almost half its value since the beginning of the year.