Circuit City shares falls to near $1.50 as HBK Investments dumps shares
Posted by: in Companies Competitive StrategyFiled under: Competitive strategy, Best Buy (BBY), Circuit City Stores (CC)
Circuit City Stores Inc. (NYSE: CC) seems to be falling into the abyss of no return. Quarter after quarter, the retailer continues to lose money and disappoint the market. Its shares have been hovering below $2 for a while, and yet no suitor has lined up to purchase the company after BlockBuster’s recent sub-$1 billion pullout. Still, are things that bad for Circuit City that it can’t even give the company away?
Yes. HBK Investments dropped 754,000 CC shares and flooded the market Wednesday with a decent position of Circuit’s public shares. Just a few days ago, competitor Best Buy, Inc. (NYSE: BBY) stated that its Q2 profit was dragged down 19% due to the cash needed to roll out its Best Buy Mobile concept to its 1,000 stores in North America. Still, the market didn’t like the largest consumer electronics chain reporting a profit slide.
As a result, shares in Circuit City sit at $1.54 this morning, the lowest share price in over five years. In fact, you’ve earned a healthy -86% if you purchased CC shares in August 2003. Nice investment, yes? Although, let’s give the retailer some credit in this year’s bear market, but still.
HBK’s sellof this week drops its position in the struggling retailer from 9.15% to 8.7%. I am surprised HBK wants to own any of this retailer, but it’s probably waiting for another offer so it can sell the remaining shares at a premium. It’s pretty sad that a premium on Circuit City’s shares would be perhaps $2.50, right?
During a visit to a local Circuit City location this week, there were a total of two customers in the store — and eight employees. Yes, Circuit City is going places.
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