Best Buy's slump might help Schulze

  • Article by: THOMAS LEE , Star Tribune
  • Updated: November 6, 2012 - 11:10 PM

The stock's continued slide could allow the company's founder to offer to buy the company for considerably less money.

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the3rdchimpNov. 7, 1210:20 AM

It makes no sense for Schulze to make an initial lowball offer. He has stressed his sense of urgency and dragging on a negotiation only hurts the stock, cost Schulze money and distracts from the turnaround. The stock is down about 3 dollars from when Schulze first proposed 24-26 but the cash flows remain positive and will continue to be positive for years even w/ some business decline. The EV/Ebitda is less than two and even $30 would be a deal. BBY's struggle was anticipated then and stock price now is confirmation. Best to make a fair offer and get deal done ASAP so management can focus on holiday sales (60% of profit, I believe) and the turnaround effort. I am looking for 24-26/share as first proposed.

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FrankLNov. 7, 12 2:06 PM

Or he could wait until after Christmas and get it for a stick of gum and some dryer lint.

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the3rdchimpNov. 7, 12 2:56 PM

This company is a bargain for leveraged buy out. Look at the free cash flow even as business declines. Under normal circumstances could be worth north of 30. No use waiting. This holiday season could be the best for Best Buy in years because of the plethora of new products and upgrades. Smartphone and tablet wars. The timing of the Best Buy Mobile stores in malls was well done. Windows 8 release should unleash alot of pent up demand for laptops and desktop pc's which have languished for past year. Wii finally has a new console. Upgraded X-Box. Mirrorless cameras. Giant LG tv's. Best for Schulze to take over ASAP so management can focus on exploiting holiday buying and the restructuring efforts. Moreover, shareprice might actually appreciate w/ the Joly plan and a good holiday and investors might be less desperate. No use in delaying if the funding is there, and it seems that it is. A strong initial offer and let's move on... that is the ticket.

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iliketobikeNov. 7, 12 4:03 PM

Just bought a small, blue tooth speaker from BB this past weekend. I had Amazon.com on my iPhone with the product an its online price. I forced them to match it or I walk. They did. This is the future, Best Buy. Find a way to price match or you'll go the way of Circuit City.

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dejadoodooNov. 9, 12 8:19 AM

Best Buy has helped me twice this year: 1, helped me rely upon eBay for a replacement non-widescreen monitor, and 2, helped me recycle an 8 year old LG TV that died.

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