Best Buy Co., Inc.(NYSE:BBY) seems to be in serious
trouble. The online electronics retailer is already up for sale. Its woes have
become worse with a research group saying that sales of consumer electronics
had fallen on Black Friday, a day seen as kicking off the shopping season in
the United States.
There was also a report in the Wall Street Journal
that a private equity firm which had been backing a potential bid for the
company might be dropping it.
Whatever the veracity of these reports, the net impact
was that the shares of the company fell more than 5 percent on Tuesday, after
already having slipped on Black Friday.
Shares fell 6 percent, to $12.15 in Tuesday’s trading.
The stock has fallen to almost half its value since the beginning of the year.
Any dip in valuation at this point creates
difficulties for the company in being acquired.
Stephen Baker, vice president of industry analysis at
research firm NPD Display, commenting on the slow start to the shopping season,
said, "In an unbalanced market, where just a few categories deliver
significant dollars, and even fewer offers any growth, the ability to deliver
positive results will remain difficult for companies exposed to the entire
consumer electronics marketplace."
The Journal also reported that Cerberus Capital
Management is in talks to join a bid for U.S. brokerage Knight Capital Group,
citing people familiar with discussions.
Cerberus has previously been reportedly backing a bid
by Best Buy founder Richard Schulz, who is taking a shot at buying his company.
But if Cerberus is eying Knight Capital instead, then
that puts a question mark on Schulz' bid, unless he finds another backer.
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