BloggingStocks

Circuit City to go out of business and close down permanently

Brian White — Fri, 16 Jan 2009 13:00:00 EST

Filed under: Bad news, Circuit City Stores (CC)

Circuit City Stores Inc. (NYSE: CC) is going away for good. The nation's former second-largest consumer electronics retailer told the investing world this morning that it had not been able to reach any kind of deal with creditors or potential bidders of the company. As such, it will ask the bankruptcy judge presiding over its case to begin liquidating all of its assets as soon as possible.

This all started when former Circuit City CEO Phil Schoonover fired over 3,500 sales staffers and tried to replace them with lower-paid workers. The first time you take away your greatest asset -- those who touch customers every day -- due to cost concerns, you're ultimately doomed.

Continue reading Circuit City to go out of business and close down permanently

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Circuit City rushes to find a buyer

Zac Bissonnette — Fri, 16 Jan 2009 10:30:00 EST

Filed under: Deals, Circuit City Stores (CC)

Three bidders are involved in negotiations to acquire Circuit City, but the outright liquidation of the company's assets remains the most likely outcome. The bankruptcy court has set a Friday deadline for the company to reach a deal with a buyer and while an extension is possible, nothing has been agreed to so far.

According (subscription required) to The Wall Street Journal, Golden Gate Capital is the bidder most likely to gain ownership of the company, but Mexican billionaire Ricardo Salinas Pliego is also in the running. His firm owns more than 1,000 electronics stores in Latin America. Hilco Merchant Resources and Gordon Brothers Retail Partners are also pairing up to make an offer.

The company's results have deteriorated even more than was expected since the bankruptcy filing. Putting aside the short-term macroeconomic problems, Circuit is being squeezed by Best Buy (NASDAQ: BBY) on one side and by Wal-Mart (NYSE: WMT) on the other. There's really no reason for the company to go anywhere other than liquidation, and that's what is likely to happen.

It's a cruel blow to the company's 30,000 employees, who are likely to lose jobs because of incompetence at the highest levels of the company.

Circuit City rushes to find a buyer originally appeared on BloggingStocks on Fri, 16 Jan 2009 10:30:00 EST. Please see our terms for use of feeds.

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Who on earth would want to buy Circuit City?

Jonathan Berr — Fri, 16 Jan 2009 08:00:00 EST

Filed under: Best Buy (BBY), Circuit City Stores (CC), Financial Crisis

Circuit City Stores Inc. (OTC: CCTYQ) continues to negotiate with potential buyers who the company says want to continue operating the second-largest electronics retailer. I will believe it when I see it.

The retailer has gotten its butt kicked by Best Buy Co. (NYSE: BBY) for years. Its penny-pinching ways has resulted in lousy service because the company was too cheap to pay experienced sales help. Moreover, this is a bad time to sell electronic gadgets and gizmos that are the very definition of discretionary spending. Retail sales have dropped for six straight months.

Anyone hoping a white knight will rescue Circuit City, which has more than $2.3 billion in liabilities, is going to be surely disappointed. The bankruptcy spooked real estate companies with mall holdings that rent to Circuit City and other chains.

Whatever interest there is in the chain is likely from liquidators and real estate investors. Even these buyers are going to drive a hard bargain because of the distressing number of chains in the same situation such as Linen's 'n Things and KB Toys Inc.

Who on earth would want to buy Circuit City? originally appeared on BloggingStocks on Fri, 16 Jan 2009 08:00:00 EST. Please see our terms for use of feeds.

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Circuit City in its death spiral: may start liquidating this week

Brian White — Tue, 13 Jan 2009 17:20:00 EST

Filed under: Bad news, Circuit City Stores (CC)

Circuit City Stores, Inc. (NYSE: CC) may start liquidating some if its assets this week, the retailer indicated a few days ago. If Circuit City cannot find someone to help, its existing bankruptcy may turn into a complete obliteration of the entire company.

It's sad for many reasons. First, the incredible mismanagement of the company in the last two years led it down a self-destructive path. Former CEO Phil Schoonover either was very incompetent or very complacent in not attacking the competition, even before the economy collapsed and consumers stopped spending.

Second, it's hard to say if the retailer knew it was headed for oblivion and was only trying to buy time when it filed for bankruptcy last November. It wouldn't be the first time.

Circuit City's situation is so dire that it indicated last Friday that it may promote itself "as a going concern, as separate business units or as individual assets -- including the sale of inventory." In other words, look for a fire sale soon. Unless it receives an equity injection, this company is dead. Dead dead. If January 16 comes and Circuit City does not have some money or a buyer, it'll start breaking itself up faster than the Titanic.

Circuit City in its death spiral: may start liquidating this week originally appeared on BloggingStocks on Tue, 13 Jan 2009 17:20:00 EST. Please see our terms for use of feeds.

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Will Circuit City disappear?

Jonathan Berr — Fri, 09 Jan 2009 13:30:00 EST

Filed under: Products and services, Best Buy (BBY), Circuit City Stores (CC), Recession

Circuit City Stores Inc. (NYSE:CCTYQ) may not be long for this world.

The troubled electronics retailer said today that it has until the end of next week to reach a deal "with interested parties" or else it would be forced to liquidate. This is hardly surprising.

Circuit City filed for Chapter 11 bankruptcy protection in November after being squeezed by both the credit crunch and rivals including Best Buy Inc. (NYSE: BBY). Moreover, consumer confidence is at an all-time low making it difficult for any seller of discretionary purchases such as electronic gadgets and gizmos.

It will be a miracle if a white knight comes to Circuit City's rescue. For one thing, Best Buy, the No. 1 retailer of electronics, is struggling too. The company today narrowed its 2009 forecast because of weak sales in December Many other retailers are facing hard times and more bankruptcies are expected.

But Circuit City has been in trouble even before the economic slowdown. In March 2007, the second-largest electronics retailer gained headlines after it fired 3,400 "experienced" workers and replaced them with lower-paid less-experienced staff. It was a public relations disaster.

Not only did it make the Virginia retailer to look like a heartless employer, but it made it seem that it did not give a hoot about its customers. People like me have gadget-phobia. Anything computerized or electronic freaks us out. When are looking to buy a new gizmo, we need lots and lots of hand holding from sales people. My fellow gadget-phobes and myself are not going to take a chance of getting poor service from Circuit City.

Like many communities, we have Circuit City and Best Buy next door to one another. Guess which parking lot is usually empty.

Will Circuit City disappear? originally appeared on BloggingStocks on Fri, 09 Jan 2009 13:30:00 EST. Please see our terms for use of feeds.

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Dirt cheap stocks, best & worst CEOs and best college values - Today in Money 1/9

Allan Halprin — Fri, 09 Jan 2009 09:23:00 EST

Filed under: Yahoo! (YHOO), Hewlett-Packard (HPQ), Home Depot (HD), Citigroup Inc. (C), JPMorgan Chase (JPM), Money and Finance Today, Circuit City Stores (CC), Research in Motion (RIMM), Oracle Corp (ORCL), Lehman Br Holdings (LEH)

In the News:

· U.S. Loses 524,000 Jobs; Unemployment Rate Up 7.2%, Highest Since 1993 and Worst Year in 60 Years

· Fed Uncover 2 More Investor Ponzi Schemes Including One Being Run by 82-Year Old

· Clients Who Made Money With Bernie Madoff Now Face a Dilemma

· Citi Backs Anti-Foreclosure Plan

· New Homes Being Built Smaller

· Mortgage Rates Fall for 10th Straight Week and to New Record Low

· Obama Team Urges Delay in Digital TV Transition

· For BlackBerry, Obama's Devotion Is Priceless

Dirt Cheap Stocks
Seven extraordinary bargains that should emerge from the recession stronger than ever. They include Hewlett-Packard, Autodesk, Crane, EMCOR Group, KBR and CF Industries Holdings.
http://www.kiplinger.com/magazine/archives/2009/02/dirt-cheap-stocks.html

Best & Worst Managers of 2008
The best leaders have not only ridden out the crisis so far but also gleaned valuable, often profitable, lessons from it. The worst? Well, some helped set the economic crisis in motion; others became paragons of bad judgment in a time of trouble. Among the best are Obama's chief strategiest David Axelrod, Home Depot CEO Frank Blake, JP Morgan Chase CEO Jamie Dimon and Oracle CEO Larry Ellison. Among the worst were Bear Stearns CEO James Cayne, Lehman Brothers CEO Dick Fuld, Circuit City CEO Philip Schoonover and Yahoo CEO Jerry Yang.
http://images.businessweek.com/ss/09/01/0108_best_worst/index.htm?technology+slideshows

Continue reading Dirt cheap stocks, best & worst CEOs and best college values - Today in Money 1/9

Dirt cheap stocks, best & worst CEOs and best college values - Today in Money 1/9 originally appeared on BloggingStocks on Fri, 09 Jan 2009 09:23:00 EST. Please see our terms for use of feeds.

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Circuit City secures debtor-in-possession financing

Zac Bissonnette — Tue, 23 Dec 2008 18:30:00 EST

Filed under: Circuit City Stores (CC)

Circuit City Stores received final approval for $1.1 billion in debtor-in-possession financing to allow it to continue to pay vendors and employees as it seeks to restructure itself after its bankruptcy filing last month.

Meanwhile, the company's operations have continued to deteriorate even more rapidly than it had forecast when it made the filing.

The company had anticipated same-store sales declines of as much as 35% when it produced its first bankruptcy budget but the company is now saying that sales at stores that aren't closing are down as much as 50% year over year.

Circuit City said in a statement that "With the continued deterioration of the macroeconomic climate, results from other retailers and our operating under Chapter 11 reorganization protection, the fact that our sales are somewhat weaker than our original forecast should not be considered a negative." The company is also looking to void leases on 154 stores it is liquidating after efforts to sell those leases failed to produce enough bids.

The bankruptcy court also let the company void employment and severance contracts with 40 former employees, including the CEO who drove the bus into the ditch: Philip Schoonover.

The company seems to think it can restructure and make a comeback with fewer stores and a better balance sheet. But the fact that better-financed competitors like Best Buy (NYSE: BBY) haven't made a bid for the company indicates that those in the know aren't so optimistic about Circuit City's future.

Circuit City secures debtor-in-possession financing originally appeared on BloggingStocks on Tue, 23 Dec 2008 18:30:00 EST. Please see our terms for use of feeds.

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Circuit City receives more financing for its operations while bankruptcy proceeds

Brian White — Tue, 23 Dec 2008 13:10:00 EST

Filed under: Good news, Circuit City Stores (CC)

Circuit City Stores, Inc. (NYSE: CC) has received a new line of $1.1 billion in financing to help it stay afloat as it navigates through Chapter 11 bankruptcy. A court approved the financing, which will replace a $1.3 billion asset-backed loan the company had previously been using.

How Circuit City will emerge from bankruptcy is anyone's guess. When it does, the American economy will still be in the throes of a recession and the name "Circuit City" will still be a black eye on the company from any consumer's perspective. Gregg Galardi, an attorney for the troubled company, indicated that sales at the retailer have plummeted 40% to 50% since the bankruptcy filing, according to The Associated Press.

At a local Circuit City in my area that is closing, the inside looks like a flea market more than any kind of retail operation. There's just a few flat-screen televisions left along with some digital cameras -- and the discounts aren't even that great. Perhaps all the good discounts have already walked out the door tucked under customer's arms. Regardless, the company will keep the new financing to pay employees and utility bills while it reorganizes and continues shuttering under-performing locations over the next few months. That is, until it reorganizes as a "new" entity and the customers still don't show up.

Circuit City receives more financing for its operations while bankruptcy proceeds originally appeared on BloggingStocks on Tue, 23 Dec 2008 13:10:00 EST. Please see our terms for use of feeds.

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2008 Trades Gone Bad #1: Going long the specialty retailers

Bryan Perry — Mon, 22 Dec 2008 14:00:00 EST

Filed under: Wal-Mart (WMT), Newsletters, Sony Corp ADR (SNE), Circuit City Stores (CC), Tiffany and Co (TIF), Sears Holdings (SHLD), Coach Inc (COH), Costco Wholesale (COST), Abercrombie and Fitch (ANF), Under Armour'A' (UA), Nordstrom, Inc (JWN), Urban Outfitters (URBN), Stocks to Sell

If you made a bet on the specialty retailers leading up to the first $600 taxpayer rebate stimulus package, you got hammered.

Talk about a government plan backfiring big time.

That $300 billion in checks that fell out of the sky from government helicopters back in the March to May timeframe didn't find its way to the malls at all.

Instead, people paid down credit card debt, and tuition, medical and other bills, leaving little for spending on non-essentials.

The result was a litany of store closings nationwide, with several old-line, brand-name retailers going out of business.

It's game over for names like Circuit City (OTC: CCTYQ), Cache (NASDAQ: CACH), Talbots (NYSE: TLB), J. Jill, Wickes Furniture, Levitz, Bombay, Linens 'n Things, Movie Gallery, Wilson Leather, KB Toys and The Sharper Image.

Traders that leveraged into darling names, like hedge fund idol Eddie Lampert's Sears Holdings Corp. (NASDAQ: SHLD), got smoked. Shares of SHLD were trading at $105 when the checks when out. Today the stock is around $40.

Even Costco (NASDAQ: COST) -- the obvious slam dunk, aside from Wal-Mart (NYSE: WMT) -- got slammed, falling from $75 to $45 following the so-called stimulus package.

Continue reading 2008 Trades Gone Bad #1: Going long the specialty retailers

2008 Trades Gone Bad #1: Going long the specialty retailers originally appeared on BloggingStocks on Mon, 22 Dec 2008 14:00:00 EST. Please see our terms for use of feeds.

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Best Buy a top analyst pick for 2009

Brian White — Wed, 17 Dec 2008 14:39:00 EST

Filed under: Competitive strategy, Best Buy (BBY), Circuit City Stores (CC)

Best Buy Co. (NYSE: BBY), which had dire predictions for its near-future results just recently, will report quarterly results for its Q3 period this morning at 9:00am CT. Although the consumer electronics retailer is in the boat with almost every other retailer in the process of suffering from a large consumer spending slowdown this holiday season, it's still positioned to be one of the long-term winners competing for shopper dollars.

The reason for this is because it now sits atop the consumer electronics world by itself. Fellow retailer Circuit City's Stores Inc.'s (NYSE: CC) Chapter 11 bankruptcy filing is causing havoc at that competitor, and the five or six times I've scouted local Circuit City stores this month have turned out to be ghost town visits more than anything. Consumers are apparently staying away from Circuit City stores in drives. On the flip side, the many times I've visited Best Buy stores have seen packed houses. Wal-Mart Stores, Inc. (NYSE: WMT) is not the only retailer doing well this holiday season. Just a guess, anyway.

Thomas Bradley of KeyBanc indicated that Best Buy now has a "virtual national monopoly" in the consumer-electronics sector. He's very correct -- who else competes with Best Buy on a national retailer level? One can argue all day long that companies like Wal-Mart and Costco Wholesale Corp. (NASDAQ: COST) are competitors, but neither offers the breadth of consumer electronics, the individual selections nor the specialized services Best Buy does. It does consumer electronics and does them very well -- and now it how no national competitor. Once the economy takes an upswing (and it will), Best Buy will have the market cornered, and that could turn out to give the retailer a very good 2009 indeed.

Best Buy a top analyst pick for 2009 originally appeared on BloggingStocks on Wed, 17 Dec 2008 14:39:00 EST. Please see our terms for use of feeds.

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Best & Worst in Money 2008: Struggling company we're rooting for most

Trey Thoelcke — Fri, 05 Dec 2008 10:40:00 EST

Filed under: Ford Motor (F), General Motors (GM), Sirius Satellite Radio (SIRI), Citigroup Inc. (C), Circuit City Stores (CC), Sears Holdings (SHLD)

This post is part of AOL Money & Finance's Best & Worst in Money 2008 feature.

There have been big hopes for all the nominees in this category at one time or another, but they've also suffered from questionable management moves of various sorts. So what's to root for in any of these companies?

Circuit City was founded in 1949; back then it was known as Wards Company. The big-box format and Circuit City name came as the result of a series of retail experiments, and became official in 1984. The company was listed on the New York Stock Exchange in the same year. In 1991, the company established a bank to operate its private-label credit card, and later offered a co-branded Visa. Big-box used car retailer CarMax (NYSE: KMX) was also owned by Circuit City at one point. In 2005, the company's board rejected a buyout offer; the company was worth a reported $1 billion then. The next year, Philip J. Schoonover became chairman, and ... well, the rest is history. Circuit City is now in Chapter 11.

Citigroup (NYSE: C) was formed in 1998 from one of the largest mergers in history: banking giant Citicorp and financial conglomerate Travelers Group. The company holds over 200 million customer accounts in more than 100 countries, and includes the investment services brands Smith Barney and Primerica. The company owns prominent, renowned buildings in Manhattan and Chicago, and also won naming rights to the new ball park of the New York Mets. But it was the subprime mortgage crisis that was Citigroup's undoing, resulting in the need for the recent federal bailout.

Continue reading Best & Worst in Money 2008: Struggling company we're rooting for most

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Circuit City bankruptcy gallows humor: Do not sell!

Zac Bissonnette — Fri, 28 Nov 2008 16:40:00 EST

Filed under: Circuit City Stores (CC), Comic Relief

Bankruptcies, liquidations, and layoffs are never fun for workers, but it's good to see that someone at Circuit City hasn't lost his or her sense of humor.

With the company deep in slash-and-burn mode, someone decided to slap a "DO NOT SELL" sign on a fire extinguisher.

Circuit City bankruptcy gallows humor: Do not sell! originally appeared on BloggingStocks on Fri, 28 Nov 2008 16:40:00 EST. Please see our terms for use of feeds.

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Wal-Mart Weekly: Taking stock of Wal-Mart's Black Friday offerings

Brian White — Fri, 28 Nov 2008 10:30:00 EST

Filed under: Competitive strategy, Wal-Mart (WMT), Columns, Best Buy (BBY), Circuit City Stores (CC), Black Friday

Welcome to the 87th installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

Wal-Mart Stores Inc. (NYSE: WMT) was set to, as usual, be one of the most aggressive discounters this holiday season in order to move as much inventory as possible. Nowhere is there a better yardstick for just how aggressive one could be than by looking at the deals offered on Black Friday.

As I sat down Thanksgiving Day to a little football and a slew of Black Friday ads to study, it became pretty clear that Wal-Mart was aggressive in its pricing, but by no means the most aggressive. Since it seems consumer electronics continue to be a focus area when it comes to holiday retailing, I focused in on that product segment. So, let's delve deeper and really see who was the most aggressive, shall we?

Continue reading Wal-Mart Weekly: Taking stock of Wal-Mart's Black Friday offerings

Wal-Mart Weekly: Taking stock of Wal-Mart's Black Friday offerings originally appeared on BloggingStocks on Fri, 28 Nov 2008 10:30:00 EST. Please see our terms for use of feeds.

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Circuit City lackluster prices will not lure shoppers

Brian White — Tue, 25 Nov 2008 10:40:00 EST

Filed under: Products and services, Circuit City Stores (CC), Recession

Although retailer Circuit City Stores, Inc. (OTC: CCTYQ) just a few weeks ago filed motions for Chapter 11 bankruptcy protection, you'd think all was well at the retailer. Not so -- the consumer electronics giant's shares closed yesterday at just over $0.21 and it's a ghost town scenario at many stores. After all, would you shop for holiday goods at a retailer "going out of business" in its current form? That's what Chapter 11 says to many consumers, anyway. Perception is reality.

After having visited a few local Circuit City locations yesterday, they were indeed ghost towns. There was nobody (nada, zilch) in one of the locations I visited, and only one other person in the other location. And get this: comparing several general products in several categories, I saw very few sale prices that could compete with the competition -- namely, Best Buy, Inc. (NYSE: BBY). In categories like computers and MP3 players, Circuit City's pricing was dead in the water. At least its employees were, for the time being, getting paid to stand around doing nothing.

The struggling retailer has a decent wealth of information at its website including an open letter to Circuit City shoppers (PDF File) about the bankruptcy. None of that will cool any heels, though. If Circuit City wants to do any business this holiday season, it has to act like the competition, and that means instant rebates (not mail-in ones) and aggressive price discounts on hot product categories. How about something like "Free MP3 player with purchase!" or something similar? Fly that message on the flagpole and customers will respond. Don't, and you might as well shut the doors until next year.

Circuit City lackluster prices will not lure shoppers originally appeared on BloggingStocks on Tue, 25 Nov 2008 10:40:00 EST. Please see our terms for use of feeds.

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Only strong retailers will survive

Lita Epstein — Thu, 20 Nov 2008 17:20:00 EST

Filed under: Wal-Mart (WMT), Target Corp. (TGT), Best Buy (BBY), Circuit City Stores (CC)

While you probably won't see many more doors closing before the end of the year, expect to see weak retailers facing liquidations if the holiday season is as bad as many predict it will be. We've already seen 22 retailers file for bankruptcy including Steve & Barry's, Circuit City and Linens 'n Things. Some may survive bankruptcy reorganization and live to see another day. Other retailers may not be able to find the funds to refinance and will be forced to liquidate and close.

Locally, near me in Florida, only one Circuit City has closed and you don't see much evidence of the bankruptcy. Shelves are not stocked as well and advertising is down, but you'd only know that if you watch the stores closely.

The top retailers, such as Wal-Mart (NYSE: WMT) and Best Buy (NYSE: BBY) will survive easily, but many second and third tier retailers will be struggling to make it. Standard & Poors downgraded the credit rating for 53 retailers already this year, which is higher than the total number of downgrades for all of 2007, and it expects to downgrade more before year end. Deloitte Research Chief Economist Carl Steidtmann told Business Week, "It's been a long time since we've seen an environment as challenging as this."

Continue reading Only strong retailers will survive

Only strong retailers will survive originally appeared on BloggingStocks on Thu, 20 Nov 2008 17:20:00 EST. Please see our terms for use of feeds.

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Up and down in the stock market: The sad saga of trader #804

Bruce Watson — Mon, 17 Nov 2008 17:00:00 EST

Filed under: Market matters, Circuit City Stores (CC), Politics

It seems like it happened years ago, but it's been only about a month since Wall Street had its huge, post-plummet surge. Touting it as the biggest one-day point gain in the history of the market, newspapers around the country featured pictures of financial industry professionals grinning and bouncing, hugging each other like it was V-J day and they were all unwed nurses wearing fresh lipstick.

In The New York Daily News, the stock market dancing monkey du Jour was a red-headed guy with a close-cropped hairdo, extravagant sideburns, and the standard blue trader's jacket. In picture after picture, the paper featured him leering, giving a thumbs-up, and hugging a burly fellow trader who was a dead-ringer for actor Michael Lerner.

At the time, I heaped scorn upon the head of the poor unknown trader, mocking his excessive enthusiasm, mildly frightening grin, and overall air of mindless faith in the system. Being something of a cynic, I knew that today's high would be almost matched by tomorrow's low, which would be followed by another dizzying high, and so on as the market tried to find equilibrium. I saw the redheaded trader's excessive enthusiasm as indicative of the kind of cocksure investing that got us into this mess in the first place.

Continue reading Up and down in the stock market: The sad saga of trader #804

Up and down in the stock market: The sad saga of trader #804 originally appeared on BloggingStocks on Mon, 17 Nov 2008 17:00:00 EST. Please see our terms for use of feeds.

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Stock picks and pans for troubled times: GOOG, PG, AAPL, COH, MCD, WMT, SIRI

Melly Alazraki — Fri, 14 Nov 2008 18:00:00 EST

Filed under: Google (GOOG), Apple Inc (AAPL), Wal-Mart (WMT), Starbucks (SBUX), Sirius Satellite Radio (SIRI), McDonald's (MCD), Applied Materials (AMAT), Circuit City Stores (CC), Coach Inc (COH), Procter and Gamble (PG), Stocks to Buy, Stocks to Sell

Following the week we have just endured, many would find it hard to return to the stock market any time soon, despite so many pundits calling the market bottom on Thursday. Bad news just keeps amassing: the Euro-zone is officially in recession, unemployment in the U.S. and globally is on the rise, the housing market is far from any sustainable recovery, the auto sector is a mess and so on.

But it is always in these hard times, when things are cheap, that bargains can be found. While cheap can be meaningless during these times as Jim Cramer said this week and Joe Lazzaro seconded, perhaps some value could be found after all. What, then, did BloggingStocks contributors find worthwhile this week?

First, let me start, not by gloating, but by pointing out that on more than one occasion, more than one contributor has suggested to steer clear of Circuit City Stores Inc. (NYSE: CC). The electronics retailer has filed for bankruptcy Monday and the NYSE has suspended the company's common stock immediately. The stock is now traded over the market under CCTYQ.

Sirius XM Radio, Inc (NASDAQ: SIRI) reported a quarter that caused Steven Mallas to pause and think. The only way he sees Sirius is as a very -- very -- speculative and risky play. Since the stock has been beaten so much and is so cheap, if it doesn't disappear by the time the economy turns, it could be interesting. But only if one has the cash to burn. Jamie Dlugosch adds a reminder about SIRI's debt, hoping it would earn a reprieve from its debt holders as it tries to operate as one company. "Just imagine what this company could do in a normal economy. It would be truly tremendous."

Continue reading Stock picks and pans for troubled times: GOOG, PG, AAPL, COH, MCD, WMT, SIRI

Stock picks and pans for troubled times: GOOG, PG, AAPL, COH, MCD, WMT, SIRI originally appeared on BloggingStocks on Fri, 14 Nov 2008 18:00:00 EST. Please see our terms for use of feeds.

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Not exactly the Best Buy (BBY)

Jamie Dlugosch — Thu, 13 Nov 2008 18:00:00 EST

Filed under: Earnings reports, Consumer experience, Intel (INTC), Best Buy (BBY), Circuit City Stores (CC)

Christmas came early for electronics retailer Best Buy (NYSE: BBY). Its largest competitor, Circuit City (NYSE: CC), waived the white flag of surrender by filing for bankruptcy. Free to operate as the single largest retailer for electronics, good times are surely here for BBY, right?

Not so fast, buster. The long-term benefits of a weakened competitive landscape are no doubt positive for BBY, but only if it manages to survive what most now believe will be a long and deep recession. This is not your ordinary recession. Businesses are failing and more are sure to follow. No firm, no matter its size or supposed strength, is immune, and all sectors are feeling the impact of deflation.

That deflation is bad news for companies that rely on the consumer for business. A sudden decline in spending can have significantly negative consequences. Employees, rent and other fixed costs must be paid no matter what is happening on the top line.You better hope your balance sheet can withstand multiple quarters of losses, because that is what is transpiring right before our very eyes.

Continue reading Not exactly the Best Buy (BBY)

Not exactly the Best Buy (BBY) originally appeared on BloggingStocks on Thu, 13 Nov 2008 18:00:00 EST. Please see our terms for use of feeds.

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Retailers react to 'seismic changes in consumer behavior'

Jonathan Berr — Wed, 12 Nov 2008 14:50:00 EST

Filed under: Best Buy (BBY), Circuit City Stores (CC), Economic data, Financial Crisis

Best Buy Co. (NYSE: BBY) today gave a profit warning that was simply breathtaking.

"Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen. Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year," said CEO Brad Anderson, vice chairman and chief executive officer of Best Buy, in a press release.

Same store sales fell a whopping 7.6% in October as consumers stayed away from the big box retailer in droves. Best Buy expects these sales to plunge between five and 15% in the four months remaining in fiscal 2009. Revenue is expected to be between $43.7 billion and $44.5 billion. Annual earnings are seen at $2.30 to $2.90. All of these figures are significantly below expectations.

Chief Operating Officer Brian Dunn said "In 42 years of retailing, we've never seen such difficult times for the consumer. People are making dramatic changes in how much they spend, and we're not immune from those forces."

Given Circuit City Stores Inc.'s (NYSE: CC) recent bankruptcy, it is hardly a shock that Best Buy is having problems as well. People struggling to pay their credit cards and mortgages are not going to be shopping for new plasma screen TVs. Some many not do any holiday shopping at all, which has got some retailers -- even those holding their own -- watching their bottom lines. Even Wal-Mart Stores Inc. (NYSE: WMT) is worried about the consumer.

Continue reading Retailers react to 'seismic changes in consumer behavior'

Retailers react to 'seismic changes in consumer behavior' originally appeared on BloggingStocks on Wed, 12 Nov 2008 14:50:00 EST. Please see our terms for use of feeds.

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Numbers of stocks near 52-week lows are staggering

Jonathan Berr — Tue, 11 Nov 2008 17:30:00 EST

Filed under: Google (GOOG), General Electric (GE), General Motors (GM), Sirius Satellite Radio (SIRI), Citigroup Inc. (C), Circuit City Stores (CC), Kellogg Co (K), DJIA, Financial Crisis

Whenever someone asks me if a stock can go lower, I reply "of course." As investors have learned the hard way over the past few months, a company's shares can go all the way to zero. Just ask holders of Circuit City Stores Inc. (NYSE: CC) (bankruptcy), General Motors Corp. (NYSE: GM) (near-insolvency) and Sirius XM Radio Inc. (NASDAQ: SIRI) (crushing debt load) whose shares are heading off a cliff.

The number of companies trading at or near their 52-week lows is staggering. Investors are faced with some of the biggest bargains they have seen in decades or the potential to get burned even further as corporate earnings deteriorate further. I am not sure whether to dip my toe further in the market or to invest in more Mason jars that I can fill with the remnants of nest egg and bury in my backyard.

One thing is for certain, stocks are getting cheap. The challenge for investors to figure out is where the market has thrown out the baby with the bathwater. Here are some examples:

Google Inc. (NASDAQ: GOOG). The largest search engine company is trading at near a three-year low. Chief Executive Eric Schmidt has said the economy is far worse than he expected. The company traded at $307.93, near its 52-week low of $300.52. CNBC's Jim Goldman is baffled by the market's reaction to Google, as am I.
Citigroup Inc (NYSE: C) has had more ups and downs than Cher. Shares of the big bank last traded at $10.80, near its low of $10.34. It is down more than 63% this year. Remember, sometimes stocks are cheap for a good reason -- like business is bad.
Kellogg Co. (NYSE: K) reported better-than-expected third quarter earnings and gave bullish guidance. The market, though, could have cared less. Shares of the cereal maker are trading at about $48, near their 52-week low of $45.25. They are down more than 8% this year.
General Electric Co. (NYSE: GE) has been in Wall Street's dog house so long it should consider a long-term lease. The conglomerate trades for about $17.73. Its 52-week low is $17.27.
Saks Inc. (NYSE: SKS) already has gotten its lump of coal from investors worried about a horrid holiday season. Shares of the retailer are down more than 77% this year. The stock is trading at $4.66, near its 52-week low of $4.23.

Numbers of stocks near 52-week lows are staggering originally appeared on BloggingStocks on Tue, 11 Nov 2008 17:30:00 EST. Please see our terms for use of feeds.

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