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Best Buy Is Dying

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Ice_Blue    978


Shares touched a nine-year low of $16.25 and were trading at prices not seen in nearly a decade after the Richfield, Minn., company issued a grim second-quarter report. The only good news for the company on Tuesday was that the hemorrhage ended with a near-rebound from the opening bell. Still, it closed Tuesday 51 cents down at $17.65.

The blogosphere is convinced Best Buy has a lot farther to fall.

"Best Buy sells 6 phone chargers and a Ke$ha CD this quarter," joked New York based financial adviser Josh Brown through his @ReformedBroker Twitter feed.

"I really don't see a lot of ways for this company to turn around," R.J. Hottovy, analyst at Morningstar, told CNBC. "Best Buy -- where it stands now -- can't compete with the Amazons of the world."

Lee Munson, author of "Rigged Money" and founder of Portfolio LLC, told YahooBreakout that Best Buy "represents the last place that people like you and me can go in and look at a piece of electronics before we go on Amazon and actually purchase it sight unseen. So I think it's important to watch the death of a great American concept of the big box store go by the wayside."

As the holiday season approaches, and with French-born CEO Hubert Joly about to take the helm, the market will watch the company's performance through the all-important shopping season, when retailers see their best performance of the year.

Joly has been labeled a master of turning around failing businesses. According to Forbes, Joly's two noteworthy successes have been to triple sales of his former employer Carleson's travel unit, Carlson Wagonlit Travel, in the early 2000s and from 1999 to 2001 growing Vivendi SA's (Paris: VIV) computer games unit which the company later sold to Activision Blizzard, Inc. (Nasdaq: ATVI).

Meanwhile, founder and primary shareholder Richard Schulze is trying to scrape together enough equity partners to pay nearly $9 billion to take the company he founded private after 27 years as a publicly traded retail giant.

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