posted
radar CC--earnings due 4-9-08--I think shorts will cover it to above 5.00 before earnings--jmo--a buy and hold for a couple weeks
Posts: 3056 | Registered: Feb 2005
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Reuters Blockbuster offers over $1 billion for Circuit City Monday April 14, 7:37 am ET By Aarthi Sivaraman and Sue Zeidler
NEW YORK/LOS ANGELES (Reuters) - Blockbuster Inc (NYSE:BBI - News) said on Monday it has offered up to $1.3 billion for electronics retailer Circuit City Stores Inc (NYSE:CC - News), in the movie rental chain's most aggressive step yet to recast itself as an entertainment hub. ADVERTISEMENT
The offer of $6 to $8 per share represents a premium of up to 105 percent on Circuit City's shares' closing price of $3.90 on Friday. The ailing retailer's stock traded above $19 within the last year.
Blockbuster said it made the offer in a February 17 letter to Circuit City Chief Executive Philip Schoonover, but decided to go public with the offer after Circuit City did not provide access to its books.
Blockbuster Chief Executive and Chairman Jim Keyes, a former CEO of 7-Eleven, was hired last year with a mandate to turn around the company. Keyes has shifted Blockbuster's emphasis from purely DVD rental markets, encapsulating both traditional and online rentals, to in-store sales of DVDs and other media such as video games.
He said the "new" Blockbuster would be "the most convenient source for media entertainment."
Blockbuster, which has 7,800 stores worldwide and a market capitalization about $80 million below Circuit City's $656.6 million, said it expects a profit of $30 million in the quarter that ended April 6.
Since taking the helm last July, Keyes has touted the long-term potential in the chain's brick-and-mortar stores and has pulled back on the company's aggressive and costly rivalry with Netflix Inc (NasdaqGS:NFLX - News) for the online DVD rental market.
The restructuring has already started to help Blockbuster, which posted a narrower-than-expected loss in the fourth quarter and recently said it expects to be profitable in 2008.
In addition to stiff competition from Netflix, Blockbuster has also had to contend with the increased consumer adoption of video-on-demand services and movie downloads.
Blockbuster bought Movielink.com last year and has said it plans to make movie downloading to televisions available.
Circuit City has been in a proxy fight with industry investor Mark Wattles, who has demanded that the company remove CEO Schoonover immediately and nominated five people for election to its board at this year's annual meeting.
Wattles has said that Circuit City not only needs new management but should also focus on overhauling its existing stores and consider selling itself.
Circuit City has seen its stock price crash to multiyear lows in the past year, and has posted losses in the past year. It has replaced more than 3,000 workers with lower-paid employees -- a move that disrupted its business and upset sales.
For the first quarter, Circuit City expects a loss from continuing operations before income taxes of $180 million to $195 million -- bigger than the one it posted in the comparable quarter a year ago.
The retailer has said it does not expect year-over-year performance to improve until the second half of the fiscal year.
Circuit City and Blockbuster were not available immediately for comment.
(Reporting by Aarthi Sivaraman and Sue Zeidler; Editing by Quentin Bryar and Quentin Webb)
Posts: 2383 | Registered: Apr 2006
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I suppose this is good news, but Blockbuster? Don't they have their own problems to worry about these days?
Maybe Best Buy will counter a bid soon. Who else do you guys think are good candidates to acquire CC?
Posts: 252 | From: WestCoast | Registered: Oct 2006
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The real question is why has Schoonover kept a lid on this for almost 2 months???This pos has gots to go...jmho
Posts: 2383 | Registered: Apr 2006
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quote:Originally posted by Mortimer: I suppose this is good news, but Blockbuster? Don't they have their own problems to worry about these days?
Maybe Best Buy will counter a bid soon. Who else do you guys think are good candidates to acquire CC?
Mark Wattles. He bought Ultimate Electronics and turned it around. This would only expand his brand.
Posts: 4381 | From: houston | Registered: Mar 2006
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Agreed. Shoonover is a pos, but I'm realizing it's better to figure out the "game" he (as well as Walters) is playing to "play" this stock yourself. I'm beginning to wonder if Shoonover did all this cutting in the first place with the intention all along of positioning the company to get acquired. It wouldn't surprise me.
As far as other potential bidders, RadioShack comes to mind. They could convert the CC stores to RadioShack Superstores?
Posts: 252 | From: WestCoast | Registered: Oct 2006
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quote:Originally posted by Mortimer: Agreed. Shoonover is a pos, but I'm realizing it's better to figure out the "game" he (as well as Walters) is playing to "play" this stock yourself. I'm beginning to wonder if Shoonover did all this cutting in the first place with the intention all along of positioning the company to get acquired. It wouldn't surprise me.
As far as other potential bidders, RadioShack comes to mind. They could convert the CC stores to RadioShack Superstores?
Or Best Buy could just take them out once and for all.
Posts: 4381 | From: houston | Registered: Mar 2006
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quote:Originally posted by invester: Or Best Buy could just take them out once and for all.
I can't believe I failed to think of that one when the company I work for did just that to one of their main competitors.
Posts: 252 | From: WestCoast | Registered: Oct 2006
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posted
They have 300m in cash, and 1b in Real Estate. What’s the business worth? They generate billions in revs. and had a .17 beat in earnings expectations. To cheap.
Posts: 4381 | From: houston | Registered: Mar 2006
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posted
Would such a deal even be permitted???I guess they could argue retail chains like WMT, TGT, RSH etc. could provide alternative options for electronics consumers...Just thinking out loud here...
Posts: 2383 | Registered: Apr 2006
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Look at this balance sheet. 3.7 billon in assets. 300 million in cash. There offering 1.3 billion for the company. The business had 11.7 billion in revenues last year. You could dismantle the company for at least 3 billion. That equates to over $17 a share. $6 offer is way to cheap. There will most assuredly be other bidders.
CC : NYSE Industry: Specialty Retailers
Balance Sheet Quarterly Annual 2008 2/29/08 2007 2/28/07 2006 2/28/06 2005 2/28/05 2004 2/29/04 ASSETS Cash & ST Investments 297 739 838 1,005 783 Receivables (Net) -- 425 226 173 580 Total Inventories -- 1,636 1,698 1,460 1,517 Raw Materials -- $0 $0 $0 $0 Work in Progress -- $0 $0 $0 $0 Finished Goods -- 1,636 1,698 1,460 1,517 Progress Payments & Other -- $0 $0 $0 $0 Prepaid Expenses -- -- -- 19 -- Other Current Assets 2,142 82 71 30 39 Current Assets - Total 2,440 2,884 2,833 2,686 2,919 Long Term Receivables -- $0 $0 $0 $0 Investment in Unconsolidated Subsidiaries -- $0 $0 $0 $0 Other Investments -- $0 $0 $0 $0 Property, Plant & Equipment - Net 1,037 921 839 739 586 Property, Plant & Equipment - Gross -- 2,221 2,019 1,843 1,607 Accumulated Depreciation -- 1,300 1,179 1,104 1,021 Other Assets 269 171 298 291 29 Deferred Charges -- -- 26 -- -- Tangible Other Assets -- 30 44 44 29 Intangible Other Assets 136 141 254 247 -- Total Assets $3,746 $3,975 $3,971 $3,716 $3,534 LIABILITIES Accounts Payable -- 1,204 1,053 962 880 Short Term Debt & Current Portion of Long Term Debt 12 7 29 $1 1 Accrued Payroll -- 99 85 -- -- Income Taxes Payable -- -- 76 72 161 Dividends Payable -- -- -- -- -- Other Current Liabilities 1,594 404 380 229 135 Current Liabilities - Total 1,606 1,714 1,622 1,264 1,177 Long Term Debt 57 51 52 12 23 Provision for Risks and Charges -- -- -- -- -- Deferred Taxes -- (32) (98) (74) (99) Deferred Income -- 76 79 230 98 Deferred Tax Liability in Untaxed Reserves -- -- -- -- -- Other Liabilities 580 375 361 196 111 Total Liabilities $2,243 $2,184 $2,016 $1,628 $1,310 SHAREHOLDERS’ EQUITY Non-Equity Reserves -- $0 $0 $0 $0 Minority Interest $0 $0 $0 $0 $0 Preferred Stock $0 $0 $0 $0 $0 Common Equity 1,503 1,791 1,955 2,087 2,224 Common Stock -- 85 87 94 102 Capital Surplus -- 344 458 721 923 Revaluation Reserves -- -- -- -- -- Other Appropriated Reserves -- (12) (0) -- -- Unappropriated (Free) Reserves -- -- -- -- -- Retained Earnings -- 1,336 1,365 1,247 1,199 Equity in Untaxed Reserves -- -- -- -- -- ESOP Guarantees -- -- -- -- -- Unrealized Foreign Exchange Gain(Loss) -- 37 45 25 -- Unrealized Gain(Loss) on Marketable Securities -- $0 -- -- -- Treasury Stock -- $0 $0 $0 $0 Total Liabilities & Shareholders Equity $3,746 $3,975 $3,971 $3,716 $3,534 Common Shares Outstanding -- 171 175 188 204
2008 Q4 2/29/08 2008 Q3 11/30/07 2008 Q2 8/31/07 2008 Q1 5/31/07 ASSETS Cash & Short Term Investments 297 483 424 364 Receivables (net) -- 593 408 449 Inventories - Total -- 2,592 1,833 1,746 Prepaid Expenses -- -- -- -- Other Current Assets 2,142 105 181 109 Current Assets - Total $2,440 $3,773 $2,847 $2,668 Investment in Unconsolidated Subsidiaries -- $0 $0 $0 Property, Plant & Equipment - Net 1,037 1,025 974 942 Property, Plant & Equipment - Gross -- 2,442 2,355 2,293 Accumulated Depreciation, Depletion & Amortization -- 1,417 1,381 1,351 Other Assets 269 198 189 191 Intangible Assets (supplementary) 136 161 154 153 Total Assets $3,746 $4,995 $4,011 $3,801 LIABILITIES Accounts Payable -- 2,371 1,403 1,166 Other Accrued Expenses -- 505 429 410 Taxes Payable -- 11 21 11 Short Term Debt & Current Portion of Long Term Debt 12 29 8 12 Other Current Liabilities 1,594 63 $0 $0 Current Liabilities - Total $1,606 $2,980 $1,862 $1,599 Deferred Taxes -- 23 (27) (27) Long Term Debt 57 52 51 49 Other Liabilities 580 503 488 480 Total Liabilities $2,243 $3,557 $2,374 $2,100 SHAREHOLDERS’ EQUITY Non-Equity Reserves -- $0 $0 $0 Minority Interest $0 $0 $0 $0 Preferred Stock $0 $0 $0 $0 Common Equity 1,503 1,439 1,637 1,700 Common Stock -- 84 84 84 Capital Surplus -- 315 311 307 Retained Earnings -- 983 1,197 1,267 Other Appropriated Reserves -- -- -- -- Treasury Stock -- $0 $0 $0 Total Liabilities & Shareholders Equity $3,746 $4,995 $4,011 $3,801
() = Negative Values In millions except per share data.
Posts: 4381 | From: houston | Registered: Mar 2006
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Circuit City's days are numbered. They have eliminated some of their lines of business in the past. Didn't they sell appliances....they don't now as far as I know. They barely sell computers, camera's, video cameras and computer software and car audio. What they do sell a lot of is TV's, some projectors and not sure about the home stereos. Now movies and games.....not sure. But to me this company is in a huge rut that they can't get out of. The only thing that saves them is the Black Friday sales.
WMT....Walmart, well they are getting into the flat panel TV's now and soon they will take a huge bite out of that segment. Think, Sams sells high end appliances....they could really sell some others if they want. Its a different feeling when you go somewhere like Sears and the salesman is pressuring you to buy compared to Walmart where they could care less.....but Walmart has no help to answer questions because they rob america's economy and boosts China's. But if they invest in both CC and Best Buy's products....they would take them both out!!
Posts: 2367 | From: Detroit | Registered: Mar 2005
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I'm merely speaking from an asset point of view. They have 1b in Real Estate, 300m in Cash, and another 2b or so in inventory, trucks, etc..... The break-up value is so much higher than the proposed $6-$8 share. I think it will sell around $12 which will be 2 billion.
Posts: 4381 | From: houston | Registered: Mar 2006
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Looks to be a very good price here; kind of falling on its ass now since the BBI deal looks to be falling apart and the dividend's been cut.
I picked up the August calls ($5 strike) at .20. Seems like a reasonable hedge.
Posts: 949 | From: Little Rock, AR | Registered: Dec 2005
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Blockbuster(BBI - Cramer's Take - Stockpickr) on Wednesday withdrew its $XX bid for Circuit City(CC - Cramer's Take - Stockpickr), citing "market conditions."
The video rental chain in April said it had two months earlier offered to acquire Circuit City for at least $6 a share, but the electronics chain showed no interest. Circuit City later opened its book to Blockbuster, but after the completion of initial due diligence, the video chain said it was dropping the effort.
"We continue to believe in the strategic merits of a consumer retail proposition that would bring media content and electronic devices together under one brand," Blockbuster Chairman and CEO Jim Keyes said in a company statement. "We will pursue this strategy through our Blockbuster stores as a way to diversify the business and better serve the entertainment retail segment."
Circuit City called its strategic review "an active and ongoing process."
"The board's review was not dependent on Blockbuster's participation," Chairman, President and CEO Philip Schoonover said in a company statement. "We are diligently working with the parties involved in the process, and intend to continue our thorough approach until such point as the board determines upon a particular strategic course of action."
The board does not have a deadline for completing the review, Schoonover said.
Billionaire activist investor Carl Icahn, who also was reviewing Circuit City's books, in May said he was prepared to step in and buy the chain himself, should Blockbuster's bid falter.
Many have questioned the value of a merger between the two struggling companies. Blockbuster faces significant competition from movie rental-by-mail company Netflix(NFLX - Cramer's Take - Stockpickr), while Circuit City has seen Best Buy(BBY - Cramer's Take - Stockpickr) continue to dominate in consumer electronics sales.
Posts: 1045 | From: novato,ca,usa | Registered: Aug 2003
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-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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quote:Originally posted by invester: Look at this balance sheet. 3.7 billon in assets. 300 million in cash. There offering 1.3 billion for the company. The business had 11.7 billion in revenues last year. You could dismantle the company for at least 3 billion. That equates to over $17 a share. $6 offer is way to cheap. There will most assuredly be other bidders.
CC : NYSE Industry: Specialty Retailers
Balance Sheet Quarterly Annual 2008 2/29/08 2007 2/28/07 2006 2/28/06 2005 2/28/05 2004 2/29/04 ASSETS Cash & ST Investments 297 739 838 1,005 783 Receivables (Net) -- 425 226 173 580 Total Inventories -- 1,636 1,698 1,460 1,517 Raw Materials -- $0 $0 $0 $0 Work in Progress -- $0 $0 $0 $0 Finished Goods -- 1,636 1,698 1,460 1,517 Progress Payments & Other -- $0 $0 $0 $0 Prepaid Expenses -- -- -- 19 -- Other Current Assets 2,142 82 71 30 39 Current Assets - Total 2,440 2,884 2,833 2,686 2,919 Long Term Receivables -- $0 $0 $0 $0 Investment in Unconsolidated Subsidiaries -- $0 $0 $0 $0 Other Investments -- $0 $0 $0 $0 Property, Plant & Equipment - Net 1,037 921 839 739 586 Property, Plant & Equipment - Gross -- 2,221 2,019 1,843 1,607 Accumulated Depreciation -- 1,300 1,179 1,104 1,021 Other Assets 269 171 298 291 29 Deferred Charges -- -- 26 -- -- Tangible Other Assets -- 30 44 44 29 Intangible Other Assets 136 141 254 247 -- Total Assets $3,746 $3,975 $3,971 $3,716 $3,534 LIABILITIES Accounts Payable -- 1,204 1,053 962 880 Short Term Debt & Current Portion of Long Term Debt 12 7 29 $1 1 Accrued Payroll -- 99 85 -- -- Income Taxes Payable -- -- 76 72 161 Dividends Payable -- -- -- -- -- Other Current Liabilities 1,594 404 380 229 135 Current Liabilities - Total 1,606 1,714 1,622 1,264 1,177 Long Term Debt 57 51 52 12 23 Provision for Risks and Charges -- -- -- -- -- Deferred Taxes -- (32) (98) (74) (99) Deferred Income -- 76 79 230 98 Deferred Tax Liability in Untaxed Reserves -- -- -- -- -- Other Liabilities 580 375 361 196 111 Total Liabilities $2,243 $2,184 $2,016 $1,628 $1,310 SHAREHOLDERS’ EQUITY Non-Equity Reserves -- $0 $0 $0 $0 Minority Interest $0 $0 $0 $0 $0 Preferred Stock $0 $0 $0 $0 $0 Common Equity 1,503 1,791 1,955 2,087 2,224 Common Stock -- 85 87 94 102 Capital Surplus -- 344 458 721 923 Revaluation Reserves -- -- -- -- -- Other Appropriated Reserves -- (12) (0) -- -- Unappropriated (Free) Reserves -- -- -- -- -- Retained Earnings -- 1,336 1,365 1,247 1,199 Equity in Untaxed Reserves -- -- -- -- -- ESOP Guarantees -- -- -- -- -- Unrealized Foreign Exchange Gain(Loss) -- 37 45 25 -- Unrealized Gain(Loss) on Marketable Securities -- $0 -- -- -- Treasury Stock -- $0 $0 $0 $0 Total Liabilities & Shareholders Equity $3,746 $3,975 $3,971 $3,716 $3,534 Common Shares Outstanding -- 171 175 188 204
2008 Q4 2/29/08 2008 Q3 11/30/07 2008 Q2 8/31/07 2008 Q1 5/31/07 ASSETS Cash & Short Term Investments 297 483 424 364 Receivables (net) -- 593 408 449 Inventories - Total -- 2,592 1,833 1,746 Prepaid Expenses -- -- -- -- Other Current Assets 2,142 105 181 109 Current Assets - Total $2,440 $3,773 $2,847 $2,668 Investment in Unconsolidated Subsidiaries -- $0 $0 $0 Property, Plant & Equipment - Net 1,037 1,025 974 942 Property, Plant & Equipment - Gross -- 2,442 2,355 2,293 Accumulated Depreciation, Depletion & Amortization -- 1,417 1,381 1,351 Other Assets 269 198 189 191 Intangible Assets (supplementary) 136 161 154 153 Total Assets $3,746 $4,995 $4,011 $3,801 LIABILITIES Accounts Payable -- 2,371 1,403 1,166 Other Accrued Expenses -- 505 429 410 Taxes Payable -- 11 21 11 Short Term Debt & Current Portion of Long Term Debt 12 29 8 12 Other Current Liabilities 1,594 63 $0 $0 Current Liabilities - Total $1,606 $2,980 $1,862 $1,599 Deferred Taxes -- 23 (27) (27) Long Term Debt 57 52 51 49 Other Liabilities 580 503 488 480 Total Liabilities $2,243 $3,557 $2,374 $2,100 SHAREHOLDERS’ EQUITY Non-Equity Reserves -- $0 $0 $0 Minority Interest $0 $0 $0 $0 Preferred Stock $0 $0 $0 $0 Common Equity 1,503 1,439 1,637 1,700 Common Stock -- 84 84 84 Capital Surplus -- 315 311 307 Retained Earnings -- 983 1,197 1,267 Other Appropriated Reserves -- -- -- -- Treasury Stock -- $0 $0 $0 Total Liabilities & Shareholders Equity $3,746 $4,995 $4,011 $3,801
() = Negative Values In millions except per share data.
here you go.. they have Accounts Payable -- 2,371 1,403 1,166
very high compared to their cash situation of 300m and receivables.
They are not paying their bills
Posts: 208 | Registered: Sep 2008
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Receivables (net) -- 593 408 449 Cash & ST Investments 297 739 838 1,005 783 Cash position less than 30% of four years ago trending down.
Posts: 208 | Registered: Sep 2008
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At August 31, 2008, Circuit City had cash, cash equivalents and short-term investments of $92.5 million, compared with $424.4 million at August 31, 2007. The $331.9 million year-over-year decrease in the cash position was driven primarily by the net loss from operations and purchases of property and equipment. These factors were partially offset by net proceeds from short-term borrowings.
There is a new CEO interm
Posts: 208 | Registered: Sep 2008
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Why are they buying more property when they are having a hard time keeping afloat currently with retail sales down for the year. Inventories are down, some stores shelves are nearly bare.
They need to be cutting back to survive IMO. Another K-Mart IMO.
-------------------- Buy Low. Sell High. Posts: 10750 | From: The Land Of The Giants | Registered: Feb 2005
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They are discussing cutting back on store openings/suspending them. but continue relocations. Huge costs.
Bankrupt? maybe unless the trend changes.
Why did they not accept the buyout? Well they never showed the books I read.. so either they didn't want them to be seen or shareholders who have lost money didn't want to be bought at a low price.
Now they are looking at .58
are they blind to the condition of the company?
I would say buy a little, maybe more if dips but aware of the risk of 0
I have been thinking about this one a lot.
Posts: 208 | Registered: Sep 2008
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quote:Originally posted by Peaser: No one wants to invest in retail right now IMO.
gonna be a tight Christmas, which is just the opposite of what they need. They have already said a weak holiday season may make or break them.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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