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billddrummer

billddrummer
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  • Disney delays release of next "Pirates" movie [View news story]
    Unlike prior releases, Johnny the Depp gets $50 million for his prancing around.
    Sep 10, 2013. 09:48 PM | Likes Like |Link to Comment
  • Blaming Obamacare For Decline In Average Work Week Hours [View article]
    Thank you for the useless rant.

    You can go back to the playground now.
    Sep 8, 2013. 12:33 AM | 2 Likes Like |Link to Comment
  • Rumors Of RadioShack Refinancing Are Unlikely [View article]
    I have really enjoyed this article. It's unreasonable to presume that RSH will find willing investors to refinance existing debt at lower rates, simply because the risk premium for the company is much too great.

    And if the company is expecting to wrap all of its existing debt into a longer-term facility, rates and financing costs, in addition to the prepayment penalties on its existing debt, would absorb much of the anticipated 'savings' such an action would reap.

    A more reasonable course of action, albeit a painful one, is to shrink the store count to free up cash which is tied up in long term lease commitments.

    Most everyone can agree that there are too many RSH storefronts. I wonder what reducing the count by 20% (company-owned stores) would mean in the form of cost savings in staffing, inventory management, logistics and rent.

    More than likely, those bottom 20% would not be missed.

    Comments are welcome.
    Sep 5, 2013. 02:51 PM | Likes Like |Link to Comment
  • The Sad State Of Consumer Income [View article]
    Fine.

    We agree to disagree.
    Sep 3, 2013. 02:36 PM | Likes Like |Link to Comment
  • Rumors Of RadioShack Refinancing Are Unlikely [View article]
    I'd tend to agree.
    Sep 2, 2013. 02:25 PM | Likes Like |Link to Comment
  • The Sad State Of Consumer Income [View article]
    Have you been on welfare?

    If not, keep silent.
    Sep 2, 2013. 02:23 PM | 1 Like Like |Link to Comment
  • The Sad State Of Consumer Income [View article]
    I'm not denying that you've paid your fair share of taxes.

    On the other hand, stock options and other types of compensation which are not wages are considered capital gains transactions.

    The .1% earn a preponderance of their income from those transactions, rather than from wages.

    And that's the reason, I believe, that the tax rate for this income group is lower than one would expect--even though they certainly pay the most taxes on both a percentage and an absolute basis.
    Sep 1, 2013. 10:23 PM | 1 Like Like |Link to Comment
  • RadioShack Is Not Worth The Gamble [View article]
    Thanks for the referral.

    You might be able to apply the same timeline to BBY.

    After a period of 'do no wrong' with Schultze, Dunn and the insiders who built the company, it's now being run by an avowed turnaround specialist.

    Short term gains--Clearly.

    Customer focus? Not so much.

    We will see what happens with the last nationwide consumer electronics chain.
    Sep 1, 2013. 02:50 PM | Likes Like |Link to Comment
  • Report: Google looking to rent a lot of Best Buy store space [View news story]
    I think the square footage being bandied about is far too much.

    600 sf seems more feasible.

    6000 sf would rival Magnolia Home Theater installations in the largest stores, including viewing and listening studios.
    Sep 1, 2013. 05:13 AM | Likes Like |Link to Comment
  • Best Buy: Monetization Of Square Footage [View article]
    All retailers rent shelf space to vendors.

    Why do you think Tide is stocked at eye level, while the generic detergent is on the bottom shelf?

    Because PG pays retailers for that premium shelf space.

    Consumer electronics vendors have been paying for shelf space for years. Depending on the company, this additional revenue is either booked as a reduction of cost of goods sold or as 'other income.'

    (Some companies will move this revenue source depending on its impact on reported operating results. If it is moved from 'other income' to an offset to cost of goods sold, the net impact is to improve the gross profit margin compared to prior reporting periods. Takes a sharp eyed analyst to discover, but it can be a meaningful swing in margins if not caught.)

    A trend which began with Best Buy Mobile's store within a store (SWAS) has gained momentum with other product types. Samsung, Apple, and now GOOG are either already subleasing, or exploring subleasing, floor space within BBY big box stores staffed with dedicated employees and displaying a broad product array.

    The link below talks about GOOG's proposal:

    http://bit.ly/1301WuG

    (I question the square footage under consideration--600 sf would be sufficient.)

    Apple SWAS in larger BBY stores are around 550 sf, with Samsung taking up a bit less space.

    So what you see in Canada is already happening in the US.
    Sep 1, 2013. 05:07 AM | Likes Like |Link to Comment
  • Best Buy: Monetization Of Square Footage [View article]
    Former BBY employee.

    For sales initiated online but picked up in store, revenue recognition was driven by how the customer paid for the sale.

    In the vast majority of cases, revenue was recognized for the internet channel because the customer prepaid for the sale on the website. Inventory would not be reserved at the store unless the customer paid through the website.

    BBY charged store inventory to account for product delivery from store stock. Then, the company originated an intercompany funds transfer from the online division to the store to 'pay' for the inventory.

    However, the internet division retained the profit margin--the funds transfer typically just covered the cost of the inventory.

    The accounting treatment may be different now, but that was the way virtually all online pickup sales were handled in the past.

    The accounting treatment for online sales originated in store replicated the sales accounting for offsite web sales.

    No impact to store accounting took place, because in most cases, items were being ordered through the website because they weren't in store stock to begin with.

    I would expect other retailers with this product pickup option to have similar accounting procedures.

    Hope that helps.
    Sep 1, 2013. 04:40 AM | Likes Like |Link to Comment
  • Rumors Of RadioShack Refinancing Are Unlikely [View article]
    Thank you for defending your position.

    Circuit City lasted much longer than pundits thought it would.

    RSH will most likely drift along for many more years.

    Whether, however, you see a meaningful return on your investment remains to be seen.
    Sep 1, 2013. 04:26 AM | Likes Like |Link to Comment
  • Rumors Of RadioShack Refinancing Are Unlikely [View article]
    Great article.

    If RSH is prudent, they will start to draw down the revolver before the bankers decide to audit the company's inventory.

    The bankers may find that the line is undercollateralized and restrict draws.

    That same thing happened to Circuit City.
    Sep 1, 2013. 03:15 AM | Likes Like |Link to Comment
  • RadioShack Is Not Worth The Gamble [View article]
    First of all, excellent article.

    I studied Circuit City's demise and several issues converged at the company's tipping point:

    The banking syndicate performed a collateral audit on the inventory backing the asset-based lending facility and determined the line was under-collateralized;

    That same syndicate rejected 'overline' financing for seasonal purchases prior to the 2008 holiday season;

    The company was unable to sell credit default swaps on the credit line.

    Those factors combined to force the first round of store closures in advance of the 2008 holiday season.

    As it happened, that was a futile gesture, since the company failed outright less than 4 months later.

    Based on your article and the apparently aimless path the company is now taking, looking at a similar scenario seems reasonable.
    Sep 1, 2013. 03:00 AM | Likes Like |Link to Comment
  • Investors in good hands with Allstate shares: Barron's [View news story]
    Interesting that ALL considers the Esurance platform a growth engine with GEICO and Progressive as competitors.

    Recently I did a quote comparison between GEICO and Esurance.

    Esurance was 42% cheaper.

    I switched.

    So I suppose I'm part of that 30% annual growth rate the article stated.

    No worries. I'm just glad I'm paying less for car insurance.

    I'm a low-touch customer--I've moved most everything else online and don't need an agent selling me stuff.

    Nice to see that investors have the same view.
    Sep 1, 2013. 02:30 AM | 2 Likes Like |Link to Comment
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