Blockbuster Inc. (NYSE: BBI) is seeing a surge in early trading ahead of a long weekend. The company realized that the buyout interest of wanting to own Circuit City Stores Inc. (NYSE: CC) was ill-founded and realized it was as good of a fit as chocolate and dog food.
Last night, Circuit City acknowledged that the bidding interest from Blockbuster was done after initial due diligence. More importantly, the ailing computer and electronics retailer reiterated that it is exploring its own strategic alternatives on an active and ongoing basis.
Circuit City shares are down 14.5% at $2.18 and Blockbuster shares are up 12% at $2.82 after an hour of trading.
We noted along with Circuit City’s earnings that it sounded more and more like the company really wants to pursue a go-it-alone strategy. We’d advise the company that a board of directors revolt needs to take place and the first and fastest way to see the Circuit City stock rise would come from the company firing Philip Schoonover. A constant and steady destruction by management missteps is no way to build shareholder value.
Jon C. Ogg
July 2, 2008
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