ceguy

2 Comments

    • Circuit City: Simply Appalling [view article]
      Actually, CC has been going down for over a decade. They have long leases in poor locations, no program to bring new customers into their stores, an incompetent marketing department (and now no senior marketing person), a senior executive running the stores with no sales experience, no profit orientation, and weak human resources. The Board has limited experience in consumer electronics retailing. Their big financial problem is that they have over $4 billion in off balance sheet lease commitments which prevents them from changing their store locations easily.

      Schoonover is obviously a weak CEO and had no store operating experience in his background. Firing the experienced people did have a negative effect, but was not the major reason the company is in trouble. With the economy declining, weak companies will fail and CC is one of the weakest companies around.
      May 02 09:37 AM
    • Three Cash-Heavy Long Ideas [view article]
      Many facts you have about CC are wrong. First, they lost money the last FOUR quarters. Second, the Canadian sub has been for sale for some time now with no takers. It's losing money and has a real value of zero. Third, book value is highly overstated due to off balance sheet lease commitments, overvalued inventory, and the bulk of property being store equipment, not real estate. Furthermore, Carlos Slim no longer owns CompUSA having just sold it after losing several billions of dollars. The best bet is to let it go bankrupt and then reorganize like Lampert did with Kmart. Shareholders lost everything on that one. Dec 14 06:24 PM
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