Mark Wattles posts
FeedPosted Jun 25th 2008 11:00AM by Brian White (RSS feed)
Filed under: Rumors
Circuit City Stores, Inc. (NYSE:
CC) is sitting on the brink of a buyout. The question is who, and how much. The deal with
Blockbuster Inc. (NYSE:
BBI) is still very possible, but investor Mark Wattles of Wattles Capital Management has said to expect a deal within four weeks regardless. With Circuit City shares nearly the bottom -- closing yesterday at $4.35 -- some entity needs to swoop in and just offer cash for the company. As in, now.
It's a foregone conclusion that Circuit City can't compete with other national consumer electronics retailers. The access to its prime real estate locations would be a main reason for the chain to be bought up at such a fire sale price. Wattles said Blockbuster and two unnamed private equity firms are most likely the three finalists ready to step up and purchase Circuit City.
While all this "due diligence" is going on for buying a retailer at such a low price, shareholders are
getting antsy with good reason. It's hard to imagine any shareholder making out on Circuit City stock -- including Wattles who stands to lose a good chunk of change unless the shares rebound. Circuit City's largest investor, HBK Investments (a 9% stake), probably needs to have a deal done as soon as possible with a sweet premium to the current share price. Who could blame them?
Regardless of who buys Circuit City, this is a company that needs to return shareholder equity back to its shareholders and just fold up and go away. It's not going to get any better.
Posted Jun 25th 2008 9:00AM by Brian White (RSS feed)
Filed under: Deals, Rumors, Management, Circuit City Stores (CC)
Circuit City Stores, Inc. (NYSE:
CC) is sitting on the brink of a buyout. The question is who, and how much. The deal with
Blockbuster Inc. (NYSE:
BBI) is still very possible, but investor Mark Wattles of Wattles Capital Management has said to expect a deal within four weeks regardless. With Circuit City shares nearly the bottom -- closing yesterday at $4.35 -- some entity needs to swoop in and just offer cash for the company. As in, now.
It's a foregone conclusion that Circuit City can't compete with other national consumer electronics retailers. The access to its prime real estate locations would be a main reason for the chain to be bought up at such a fire sale price. Wattles said Blockbuster and two unnamed
private equity firms are most likely the three finalists ready to step up and purchase Circuit City.
While all this "due diligence" is going on for buying a retailer at such a low price, shareholders are
getting antsy with good reason. It's hard to imagine any shareholder making out on Circuit City stock -- including Wattles who stands to lose a good chunk of change unless the shares rebound. Circuit City's largest investor, HBK Investments (a 9% stake), probably needs to have a deal done as soon as possible with a sweet premium to the current share price. Who could blame them?
Regardless of who buys Circuit City, this is a company that needs to return shareholder equity back to its shareholders and just fold up and go away. It's not going to get any better.
Posted Jan 28th 2008 3:30PM by Brian White (RSS feed)
Filed under: Value and lack thereof, Public or private?
When Mark Wattles
stepped up his holdings in consumer electronics retailer
Circuit City Stores, Inc. (NYSE:
CC) last week, shares in the retailer jumped over 33% to $5.04 Tuesday-Wednesday last week. Circuit City's share price has settled back down the $4.80 range today -- still a gain of over 25% from a week ago close of $3.76. The retailer still is not worth that amount with the current leadership in place.
Circuit City is now valued at just over $800 million, which puts the company in prime shape for acquisition. One must ask, though, why private equity was not interested a week ago when the company's market cap was valued under $600 million? That's a little over half a billion for the second-largest consumer electronics chain in the U.S. Apparently, not a single entity besides Wattles sees any value here.
Wattles did say that he is considering an
outright purchase of the company or a forced leadership change now that he has amassed over 6% of the company's shares. Something -- anything -- needs to shake up Circuit City back into profit reality soon. No other money has come calling, so it may be Wattles's sole call to make. If you're holding on to your CC shares -- and you haven't sold them on fear -- you may soon be rewarded. That is, if you haven't taken profits from the company's wild increase last week.
Posted Jan 28th 2008 12:22PM by Brian White (RSS feed)
Filed under: Deals, Rumors, Circuit City Stores (CC)
When Mark Wattles
stepped up his holdings in consumer electronics retailer
Circuit City Stores, Inc. (NYSE:
CC) last week, shares in the retailer jumped over 33% to $5.04 Tuesday-Wednesday last week. Circuit City's share price has settled back down to $4.74 this morning -- still a gain of over 25% from a week ago close of $3.76. The retailer still is not worth that amount with the current leadership in place.
Circuit City is now valued at just over $800 million, which puts the company in prime shape for acquisition. One must ask, though, why private equity was not interested a week ago when the company's market cap was valued under $600 million? That's a little over half a billion for the second-largest consumer electronics chain in the U.S. with nationwide locations. Apparently, not a single entity besides Wattles sees any value here.
Wattles did say that he is considering an
outright purchase of the company or a forced leadership change now that he has amassed over 6% of the company's shares. Something -- anything -- needs to shake up Circuit City back into profit reality soon. No other money has come calling, so it may be Wattles's sole call to make. If you're holding on to your CC shares -- and you haven't sold them on fear -- you may soon be rewarded. That is, if you haven't taken profits from the company's wild increase last week.
Posted Jan 23rd 2008 2:17PM by Brian White (RSS feed)
Filed under: Deals, Rumors, Circuit City Stores (CC)
Circuit City Stores, Inc. (NYSE:
CC) may have a party interested in finally turning it around.
Ultimate Electronics owner Mark Wattles has added to his holdings in the troubled consumer electronics retailer to the tune of 11 million shares. He's been acquiring the shares since late last year and now owns 6.5% of the retailer. Since
Best Buy, Inc. (NYSE:
BBY) desperately
needs a solid competitor, perhaps Wattles is the right person to give it one.
Wattles, who built
Hollywood Video into a powerful force in the video rental market and an
entertainment industry veteran, could be interested in Circuit City since the retailer is primed for an acquisition soon. After announcing
disastrous December sales and a plethora of bad news, Circuit City is on the ropes and its
CEO may be shown the door soon.
Wattles, who serves as Ultimate Electronics's CEO after taking control in a 2005 bankruptcy auction, has publicly indicated that he wants to expand Ultimate's store count. How better than to take a national chain with plenty of locations and acquire it at a fire sale price? Right now, Circuit City shares are sitting at $4.83, down from its 52-week high of over $22. Is Circuit City being primed for a buyout? If not, it may go
further down the tubes soon until it completely re-invents itself.
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