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On 2-25-05, Circuit City's (CC) board of directors has rejected the takeover offer of $17 a share by an investor, Highfields Capital Management. The specialty retailer prefers to stay on its current course of repositioning its strategy and operations. The board also doubled the stock buyback authorization to $800 million, of which $455.7 million remained as of the end of February. The stock only fell slightly upon the news. However the possibility of a sweetened bid cannot be ruled out.
Circuit City Stores, Inc. is a retailer of video & audio equipment, other consumer electronics & office products, including computers, software, & accessories, throughout the U.S. Stores include 625 audio, electronics, & computer stores & 5 mall-based stores in U.S. Discontinued appliance sales 7/00. Spun off its 64% interest in CarMax to shareholders 10/02. Acquired InterTAN 5/04 (1,026 stores in Canada). Has 5,800 stockholders, 46,100 employees.
Circuit City's same-store sales performance has turned disappointing. After declining 4.3% in the third quarter, they fell 5.8% in the key month of December. A lower volume of store traffic and heavy promotional activity were responsible for the disappointing showing. Although Circuit City has made numerous moves to turn things around (see below), fixing these problems could take a while.
Circuit City is continuing to add and relocate stores. By the end of fiscal 2004, the retailer will probably have opened 31 stores and relocated 29 more. In fiscal 2005, the company plans to build 30-40 stores, about evenly split between new sites and relocations. The expenses associated with the relocations (and one remodeling) will be an estimated $41 million in fiscal 2004 and $28 million in fiscal 2005. New and relocated stores are generally performing better than the rest of the chain, but these units make up a less than a third of the store base.
Will the retailer's upgrades bear fruit? Within the past several months, Circuit City has improved its Web site, gotten new merchandise into its stores (thanks to its acquisition of InterTAN last May), changed its advertising campaign, begun a rewards program for shoppers, set up an agreement that allows Verizon Wireless to operate a department within Circuit City's stores, and hired a chief merchandising officer. It is too early to evaluate the success of these steps, but they will begin to have a positive impact soon. The company's stock-repurchasing program is ongoing. Circuit City is authorized to buy back up to $400 million of its stock. As of the end of the third quarter, it had bought back 24.8 million shares for $294.4 million. company will complete the repurchases in fiscal 2005.
-------------------- Disclaim: I don’t guarantee the accuracy of the information I post. All my posts are based on my own research. I am not a registered investment advisor and therefore I am not qualified to give you any investment advices. You Make Your Decision!
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quote:Originally posted by Original_Cashmaker: I now feel like I've influenced others to attack cashmakers, I apologize. The feud is over. I don't care anymore.
All points of view are valuable and we all highlight bad picks at times.
We will get better together.
-------------------- The light of truth is blinding to most.
More comforting to look only at the shadows of falseness.
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posted
OC, I don't need your help to bash cashmakers. I was just pissed because I read the whole post and I didn't know where it was going and to me it seems as though he is posting this to sound as though he is a reliable trusted source for information, as if sandwiching in a few press releases is going to help me out. I read plenty of my own press releases, I was just hoping that he/she was going to tell me that the stock was attractive/unattractive and at what price so I could compare.
And not that it isn't somewhat helpful to learn such things, but I try to come to this board to get the latest info onmoving stocks. His post is about as helpful as me posting this:
Paul Wolfowitz, the most dogged advocate in the Bush administration of using U.S. power to transform the Muslim world, on Wednesday night sought to head off criticism of his nomination to lead the World Bank, saying: "I believe deeply in the mission of development."
Speaking hours after President Bush announced he intended to send his hawkish deputy defense secretary to the world's leading development institution, Mr. Wolfowitz struck a conciliatory tone.
He told the Financial Times: "Before I have my own vision, I need to do a lot of listening."
Some wary Europeans and development economists have argued he is ill-suited for the post.
But Mr. Wolfowitz said: "I look forward to meeting the European executive directors and the European finance ministers and development ministers. I know that in this job I would be working for them as members of the Bank. I think they'll find me a good listener, and I know I have a lot that I need to hear and understand.
"I had very good conversations on the phone today with a number of leaders around the world, including the Spanish managing director of the [International Monetary Fund], Rodrigo de Rato, who was very positive.
"People who know me well from my development experience like the prime minister of Pakistan, Shaukat Aziz, or Sri Mulyani, the economic development minister of Indonesia, are very positive. I hope as others get to know me in this field, they'll form a similar opinion."
Mr. Wolfowitz's candidacy follows the nomination of John Bolton, also a conservative hawk and a skeptic about multilateralist diplomacy, to represent the U.S. at the United Nations — choices that underline Mr. Bush's eagerness to see multilateral organizations advance US foreign policy.
But Mr. Wolfowitz said: "This is not about changing the agenda of the World Bank. The agenda of the World Bank is about poverty reduction, about helping billions of people lift themselves up out of misery. It's a unifying mission that brings people together, and I look forward to that opportunity.
"Problems like poverty and HIV/AIDS need to be addressed for their own sake as humanitarian issues, but it's also the case that soundly-based economic development supports the advance of liberty and freedom as well."
Nevertheless, the nomination could start a struggle within the bank.
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