Is it true? Is Bestbuy going private? Today the founder and former CEO of Bestbuy (NYSE:BBY), Richard Schulze, informed the board that he will be immediately resigning from his spot as chairman of the board, weeks before he was to step down to chairman emeritus. Minutes before the market opened today, BBY stock took a slide as investors worried that Richard would eventually dump his 20.1% stake in the company, thats about 1.3Billion. The stock fell nearly 9% about a hour or so into trading.
New rumors have emerged about Bestbuy going private, and the word on the street is that for this to happen, Richard and his backers would have to offer at least $30 a share, about 12Billion. After this news hit, the stock experienced a spike in price off the days low and continues to rise and it seems to be business as usual for traders. If this is to happen and Richard and his gang buyout at the minimum $30 per share, those who bought at today’s low of $18.19 will see a gain of at least 65%!! As I write and glance at my chart (thinkorswim), the stock continues to climb and today’s deep slide is all but erased.
Private or not, Bestbuy is emerging from a slump that it experienced when it charged off the stake it bought out from Carphone Warehouse and it is not going to slow. The bears can say all they want, but if the plans to go private are nothing but rumors, there is still lots of upside in BBY. Amazon (NYSE:AMZN) and Walmart (NYSE:WMT) are not going to take over the entire world, anyone would be daft to think that in the future, everything is bought online and delivered to your doorstep. If it were the case, the bears all over the news would be telling you to buy futures in shipping companies and advancements in transportation instead of margin thin Amazon. The media is a powerful tool folks, Understand it and use it to your advantage.
So if the rumors are true, here’s to a nice long vacation.