Best Buy(BBY) is under $11.50 now, the lowest its been in over 10 years. Comp store sales were down 4.3% last quarter. Richard Schulze, the company's founder said a few months ago he wanted to buy the company for around $25 a share. I guess if he is still interested in buying the company now, it might be for under $16 a share? The company is still profitable though, and imo improvements can be made to increase SSS and perhaps stabilize profitability, however some of these will involve closing stores and taking large charges for the closures. Imo BBY will probably be a survivor, however the stock may first drop quite a bit more before it rebounds. Some skeptics might say the stock might drop to $6, then Schulze might make a $10 a share offer, while other will say BBY might follow in the path of Circuit City. Some beaten down companies do recover. Pier One stock(PIR) dropped all the way down to 10 cents a share a few years ago. Now it is around $20 a share.
Radio Shack stock(RSH) is under $2 now. It was around $20 two years ago, and around $67 at its peak in 1999. Radioshack is having huge losses though,while Best Buy is still basically profitable(perhaps aside from one time charges?). I guess Best Buy is the safer bet, while RSH seems like the longshot. When the stock analysts promote a theme they are often wrong though. I remember years ago the demise of Fossil was predicted based on the theme that everyone will be carrying devices with a built in clock, so they won't want to wear a watch. They were so wrong about that.
Last edited by JK98; 12-03-2012 at 03:58 PM.