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Best Buy Founder Makes $8.5 Billion Bid To Take Company Private
zacharye writes "Best Buy founder and the company's largest shareholder Richard Schulze has offered as much as $8.5 billion to take the company private. Schulze had been rumored to be preparing a takeover offer for some time, and he recently assembled a team of executives that will run the company if his buyout offer is approved. His offer amounts to between $24 and $26 per share, a premium of as much as 47% over Best Buy's stock price at Friday's close."
Title should read "Best Buy Founder Tells World He Will Try To Find $8.5 Billion To Take Company Private"
I doubt he gets it.
It did. By several dollars. On Friday the stock was only trading in the $18 range. Today it's been in the low 20s, closing just shy of $20. In fact, Yahoo, right on the linked page, says it's up 2.35 from Friday's close, more than 13%. I'd say that's up quite a bit.
Oh, now I see the source of the confusion. That 24-26 range in the summary is the range that the Best Buy founder offered to pay to buy out the company, not the actual price of the stock.
You get old enough (and rich enough) and it's not about the ROI anymore, it's about making 'em do it they way you tell 'em to.
It's a public company. While he's the largest shareholder (i.e. owns the most of it), there is no single owner of the company at this time, since other people own shares as well.
Why are you baffled by this? Is I own object x, and I know that suddenly someone is interested in it for 50% more than I currently can sell it for, then the price goes up. The only reason it hasn't jumped more is because this isn't a firm bid, but simply interest. The market is factoring in how credible this interest is and what the odds are of it coming to pass. Simply markets trying to price a security in a volatile situation.
See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
His offer amounts to between $24 and $26 per share, a premium of as much as 47% over Best Buy's stock price at Friday's close..."
Um, SOLD!!
The soylentnews experiment has been a dismal failure.
Title should read "Best Buy Founder Tells World He Will Try To Find $8.5 Billion To Take Company Private"
I doubt he gets it.
I have no doubt that he will.
First he's the founder and billionaire. That means he's got a "track record" among the money crowd.
He will have a plan when he goes shopping for money.
He's the founder who'll rescue the company.
The money guys will be drooling over all the fees, commisions, and every other way they'll make a fortune off of this guy - and they will be right there to help him get his money.
He will can hundreds if not thousands of people, restructure debt, and other things that will stick it up the ass of the working and middle class.
Oh, and he'll probably will NOT have to put up much, if any, of his own money.
Those people live in a different world than you or me. If they get into trouble with debt, the banks kiss their ass and help them to deal with it even if it hurts them. And no one calls them "irresponsible", "free loader" or any of those names. And if need be, some well placed calls to people in Congress and some really cheap taxpayer money will come their way.
They call them "job creators". And if you think he got where he is by hard work and some risk taking, I have a bridge in Brooklyn to sell you.
Now, I'm gonna go cry myself to sleep.
Everything there is at least 40% over what it costs everywhere else.
He should have bought it through newegg or amazon, it would save him a few billion.
Full disclosure here: I work on a Geek Squad, one of the few women in the business. Maybe I'm just lucky (large store in NYC, and no, I WON'T say which) but this GS seems a lot better than most of them. The dead weight from the last couple of hiring cycles is long since gone and we've all become a sort of piecewise machine. They also have me selling a fair amount, despite my habit of getting customers cheaper items and discouraging them from certain services and products ("Don't buy an ethernet cable here, don't bother with the restore discs, you can make those yourself and here's how").
The GS is not the problem. We're hamstrung by SOP for the most part. Left to our own devices we'd be giving much better customer service. But there are Ways Of Doing Things, which must be followed on pain of pain. My supe, bless him, allows us to bend the rules just short of breaking in the interest of customer service, and we get very high customer service ratings for a GS.
I guess the point is, we're not all bad. And the stupid high school kid in Bumblefuck, MO isn't representative of the entire brand. If you want good service, BE INFORMED. Ask us questions. Don't be afraid of the machines; they're just tools. Make use of us; we in the GS are the one contingent with a triple-digit IQ in the store. You can get much more than the brochures say.
This actually is very interesting. I don't know what the plan is for this, but i do know that being beholden to shareholders has forced many companies to make business decisions that were not very prudent in the long term.
by going private, this would allow Best Buy to alter their current strategy and become more competitive in the electronics marketplace.
no one is going to invest 8.5 billion dollars for something like this without a solid plan. i can think of dozens of ways to improve their bottom line, and i'm sure that people more experienced than i could think of hundreds. what best buy has at the moment is a huge chain (nationwide?) of retail locations that their local demographic typically depend upon for their electronics needs. however, with amazon and probably newegg biting hard into their overhead, this might be part of a strategy to expand their online presence. this would be a move that the shareholders would never agree to, as it would involve short term loss for long term presence - but as a private entity beholden to none, they could make a mint by simply offering electronics online or 'ship to store' at competitive prices by investing in distribution and warehousing facilities
If there is something you feel feel should be on Slashdot, there is a "Submit Story" link at the bottom of the page. I suggest you use it instead of posting an off topic comment.
I've always considered Best Buy a terrific example to illustrate the quote "No one ever went broke underestimating the intelligence of the American public."
It doesn't have to be about fooling anyone though. They can get quite a lot of business just through desperation... sometimes you need a cable right now, and there's Best Buy.
The problem Best Buy has is that they are starting to stock fewer of those desperation items. I've not been there in years, even when desperate, because it became increasingly unlikely they would have what I was looking for.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Is there ANY good reason to go into that hellhole of a store?
That one time when I can't find something at Staples/Office Depot, am too lazy to drive to MicroCenter, but want it NOW, so ordering it from Amazon or NewEgg is not an option.
This happens about once every 2 years
They should just increase operations in emerging economies, Best Buy in Mexico is doing quite well as far as I know, the Guadalajara store payed off in 1 and a half years when the expected best case scenario was 4 years.
In the U.S. they should just decrease brick and mortar stores and move to online retailing.
C-x C-c
You know what would be a smart plan? Re-cast Best Buy as a "test the electronics" store. You charge $50/hour to rent a testing room where you can try any electronics that you like, and a means to easily order from Amazon on the spot.
The store doesn't have to have much stock, or as many employees (since they are not moving a lot of stock around). The would of course also get affiliate commissions from Amazon for all equipment purchased.
The difference is that it would be making money off the way people use Best Buy already...
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Insider (those who typically own more than 1%, or are active in the leadership of a company) trades - either sells or buys - must be announced at least 1 quarter in advance (SEC rules). Additionally, since he doesn't have all the capital available himself, he needs to get others to invest with him, and given the size of placement it may need to be publicized as well (SEC rules).
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
"Creating jobs" at Best Buy right now is like hiring people at a buggy whip factory in the 1930s to escape the depression.
(Never mind the economic absurdity of the whole "job creators" meme in the first place).
I went in there, in desperation, looking for a SATA controller. They kid they had on the floor says "oh all the controllers are over here" and took me to the joysticks and game pads.
That was the last time I went into Best Buy for *anything*. I refuse to walk into that store.
Nobodies Prefect
Tidbits for Techs Technology Blog
So what are Best Buy's total assets for all their stores? That's a lot of prime retail space in many places, to say nothing of the huge quantity of electronics.
Cables are to Best Buy as soda is to McDonald's.
And, actually, as Best Buy prices go, $57.63 for TWO SATA cables isn't that bad. A couple years ago I had an immediate need for a USB cable. They wanted $50 for ONE. I decided my need wasn't that great. Ordered ten online (to meet minimum order requirements) and got them for $12 plus shipping. I was tempted to take the other nine and hang out in front of Best Buy offering to sell them for "half price".
Jobs are a bit like energy, you can't really "create" them. Either there is a market or there is not. If there is a market, there will be jobs. By the very nature of the market laws. Someone will come and want to fill that market. And to do that he needs to hire people. If he doesn't hire people, then he will not be able to saturate the needs of the market and someone else will try his hand at it, too.
So please stop praising people who "create" jobs like they're the next coming of the messiah. The only reason they "create" jobs is that creating these jobs and hiring people to fill them is the necessary evil to them on their quest for money. If they could, they'd instantly cut all those employees because essentially they're just costing them money.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Your comment leads me to infer that you believe:
- People are not embarrassed to be on welfare
- People make more money on welfare than on a minimum wage job
- Either: the few people who somehow "game the welfare system" make it not worthwhile for those who use it as a legitimate safety net
- Or: most people who are on welfare are gaming the system and riding the gravy train
- Welfare is cheating you out of your hard-earned money
- You, yourself, will never need a safety net
Jobs are a bit like energy, you can't really "create" them.
I own a business. I can create a job by choosing to hire someone. The job is real; a person would earn money from doing it.
If jobs could truly not be created there would be a fixed number at all times. That is not so.
If there is a market, there will be jobs.
Only if people are willing to enter that market as providers. There is NO market before someone decides there is a possibility of earning money performing some task or offering some service, but it's up to the job creators.
It's up to job creators to enter a market and to create the jobs.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
People are willing to work for a good salary or a good hourly rate.
Drop the hourly rate and the benefits to below living wage, and they have no incentive to work full time, particularly if they can satisfy needs better with the social safety net. Why work if you're still going to bo bankrupt?
Of course, we then say "well then let's drop the value of the safety net so that it's below the wages that are available."
But then you risk another rational choice: criminal activity. Why work legally and go bankrupt if you can work in the gray or illegally and survive? That's where spammers and drug dealers come from.
Most people don't see any particular task as beneath them, but they do see some wage levels as pointless thumb-twirling. You want people to scrub toilets? Pay them an annual wage above the federal poverty level and they'll be happy to. Pay them twice the federal poverty level and they'll whistle while they do it. Pay them at minimum wage or below, and there are very few jobs you can get them to do.
Yes, this picture is incompatible with our macroeconomic situation. But microactors don't care about macroeconomics. They care about making ends meet and accounting to those to whom they are accountable (creditors, utilities, and dependents first amongst these, not "the system").
STOP . AMERICA . NOW
The only reason they "create" jobs is that creating these jobs and hiring people to fill them is the necessary evil to them on their quest for money.
A more ignorant statement of why people start businesses, I could not imagine...
Most businesses are not really started around money, they are started because the owner wants to do something better. That is why I created my own business as a consultant, because I was fed up with how corporate IT did development and I wanted more control over the process of programming.
And yes I did CREATE that job. Before I started my business, there was no job - now it is a job paying for me and my family to exist.
I'm sure you think I am scum now that you know I have my own business, but if I cared what other people thought about anything I'd live a gloomy life indeed.
The thing is, the attitude you exhibit makes me sad because you are the reason the term "wage slave" exists. You have built the cages that keep you trapped in your own pallid existence, with no control over the job you have because you do not understand where they come from.
Wake up and better yourself man.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Your example is quite literally insane, and the most twisted idea of what a job is I have never seen.
The fact is I have created the job regardless of what the person does. They still get money from me. The job may go to someone else soon, but the job exists independently of the quality of the one that holds it.
Likewise, if you have an existing job that becomes open (employee moves, quits, whatever), hiring a replacement isn't "creating a job".
I cannot help here but brandish the colloquialism DUH DUH DUH DUH DUH.
Hiring a replacement for the SAME FUCKING JOB is not a new job, it's the SAME FUCKING JOB. That someone else created... How can you even use that as an example????
Nothing brings out epic levels of ignorance like discussion of what jobs really are on Slashdot.
I award you no points, and may the Flying Spaghetti Monster find something of worth in you to add to the Great Sauce.
I will respond no more on this topic, you may feel free to type as vigorously and foolishly as you will. I just hope that someday you understand the reality of how jobs are created so that you can benefit rather than be entrapped by the system in which we all live.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Well, I can't speak for all of Geek Squad, but I can assure you, I wasn't handled for my sales ability or for an outgoing personality. I was hired because I'm intelligent and know how to deal with computer issues. Yes, sometimes I end up doing some sales, but if you were to count the number of people I actually sell things to (or even try to sell things to) versus the number that I help--for free--at the counter, just answering questions and fixing minor issues, it's actually a very low ratio.
I think Geek Squad--much like Best Buy as a whole--gets a much worse rep than is deserved. I've said it before, and I'll say it again--they're far from perfect. But from what I've personally experienced, the majority of people who come to us leave satisfied. The problem is that the minority who aren't satisfied are VERY vocal about it. Moreover--and I could go on for hours with examples, but I'll avoid that here--many of the people who are dissatisfied, in my opinion, are that way due to their own unrealistic expectations.
Just a few quick examples: someone who has a TV with nothing more than the manufacturer's warranty comes in just weeks before it's about to expire and wants service done. Since we're bound to honor manufacturer's warranties by the manufacturer's terms, this means we have to send the unit out for service, which can potentially take a couple weeks. At this point, quite a few people just go apeshit. They think that any problem with their device, no matter how minor, entitles them to an immediate replacement to a brand new device, no matter how old their other is. Not only that, but when the unit comes back from service, they expect the warranty to magically be extended for another year (or however long it was originally for). When you have to break it to them that this simply isn't the case, they get pissed off, and then go shouting to anyone that will listen how awful Best Buy and Geek Squad are for something that is entirely out of our hands, and entirely standard across the industry.
Other times, people are just impatient. Computer maintenance takes time, pure and simple, to make sure you're not missing anything. Add on top of that the fact that sometimes you get a backlog of work and can't immediately start service on a person's computer. So, you tell them at check-in that it could take up to a week, and that you will give them a call just as soon as it's finished. So they call back the next day, asking if it's done. And then the next day, asking if it's done, and so on and so forth. When you try to explain to them what you're doing and why it's taking so long, suddenly everyone becomes the most important person in the world. "But I'm a student! I need it for class!" "But I need my computer for my business!" "But I have important emails to respond to!" People just don't seem to understand that EVERYONE thinks they're important, and we can't prioritize service based on how highly you think of yourself. If things were truly so important, you'd have a backup computer. Regardless, even if you manage to get the computer back to them in 4 days, versus a quoted 7, they show up all in a huff, complaining about everything taking so long, and proceed to go out and complain to everyone that'll listen how horrible service is. There's simply no winning with people. And God forbid if you need to send a computer to a service center for serious repairs...
This is pure conjecture on my part, but I'd say the biggest problem for Geek Squad does not necessarily come from the quality of the actual work done, but from the customer service aspect of the interactions. People simply hate being told something will take time, or that something is not covered (no, we won't send your device out just because you're getting near the end of your warranty if it shows absolutely no signs of malfunctioning). Unfortunately, I have no idea what anyone could do to fix that problem.
No, it's the same one. It's not nearly as bad as Worst Buy (holy shit that place is a nightmare if you want to return something; my wife and I tried that once because she didn't want to wait for a laptop from Newegg, so we got one at BB over my protests, and of course it had a problem, and they didn't want to take it back without paying a fee; now she refuses to step into another BB). However, it is a hassle, as it's very slow, as the line is frequently long, and they always, for some stupid reason, have to wait for some dumbass manager to come approve the return, and of course he's nowhere to be found when he's needed (and he's needed for every single return too). It's not like returns at someplace like Walmart or Target, which are lightning quick and don't have all the hassle.
Welfare as a safety net is wonderful. I use it myself because I'm autistic, and it's a damned good relief not to have to bust my brains looking for a job that simply isn't there.
Nobody wants to hire me because I'm a lunatic with no social graces, and I was born that way.
To imply that I deserve to fall by the wayside is to imply that we subscribe to darwinian socialism of survival of the fittest.
If the guy has enough money to buy back the company now, why not wait for the downturn then buy it for less? Hostile takeovers are only a problem if you don't have the money to fight them.
People are not embarrassed to be on welfare - Sadly, some are not.
People make more money on welfare than on a minimum wage job - Depends on their situation, but it's entirely possible. It generally takes at least one minor involved to make this true though.
Or: most people who are on welfare are gaming the system and riding the gravy train - Doesn't need to reach 'most' in order for massive amounts of fraud to occur. See the article about something like 1.5k false rebates submitted to the IRS. It's not that everyone cheats, is that those who DO cheat generally do so massively. Still, fraud rates have been dropping for years with effective auditing/enforcement.
Welfare is cheating you out of your hard-earned money - I'd rather see my money spent more effectively, yes, but it's not strictly 'theft'. I try to be pound-wise by thinking that spending MORE, in the right spots, can ultimately save me money - such as more money for schools(where appropriate) can mean less expense for welfare. Though you gotta prevent it from being spent on more administrators, as opposed to books & teachers.
I don't read AC A human right
Based on your anecdotes, I'd argue that Best Buy is under-delivering on service in every possible manner.
For in-warranty defects, it's becoming fairly common to replace defective devices with new or refurbished ones when the warranty still applies, and to extend a 1-year warranty or longer from that day onward. If you turn in an iPad with a defective screen or to replace its battery, for instance, Apple will hand you a refurbished iPad -- not the one you brought in. As recently as a few months ago, they replaced iPods with entirely new ones. In my experience, kitchen appliance and vacuum cleaner vendors do the same exact thing, so I'm hardly cherry picking.
As for how you service an actual repair, my 2007 laptop would no longer turn on recently. I brought it to the local store down my street.
It's not a big store chain: three stores in three cities that are an hour or two apart from each other. I was not one of their customers, either. I was just another guy walking in, who bought a laptop in a different country, and needed it repaired ASAP.
They took it in for a diagnostic and a quote. This meant shipping the laptop to a nearby city -- and shipping it back free of charge if I refused the quote.
I got a quote by email the next morning. Without my laptop to read emails (fail!), I only discovered this when I called in for an update the follow-up day.
They needed to replace the laptop's top case (the keyboard/trackpad part). I highlighted that I needed a qwerty keyboard rather than the local azerty flavor. They understandably had none in stock; ETA one week as a result.
Understanding it was my work laptop, they immediately offered me one of their (free) replacement laptops until mine got repaired -- a 13" MacBook Air, no less. My tools and data were on my own device, so I declined, but their offer left me with an absolutely delightful impression.
They received the top case on the next day -- much faster than expected. The laptop was waiting for me at their store the following morning. The new top case came with a 1-year warranty.
Incidentally, its keyboard had a few defective keys. I brought my laptop back on the spot. It was waiting for me with yet another newly ordered top case the next afternoon -- free of charge.
In a more typical situation for them I'd likely have gotten a next-day repair, including the round trip to the city where they're stocked in spare parts. Which qualifies as impeccable service.
Not all companies deliver service like this, but they should strive to. It also leads me to suggest that the only acceptable reason for making a customer wait for a whole week nowadays is if you're waiting for parts coming from the other end of the world. Anything else has understaffed and poor logistics written all over it.
If you're basing your decision of what region in which to live on proximity to a retail big-box chain, you've got some serious fucking problems.
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
At $50 for a USB cable, you're better off buying a $50 USB printer, and reselling the ink on eBay!
Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
My mom, who knows nothing about technology, went into a Best Buy looking for a new 'DVD' player. She wanted the 'upgrade to DVD, whatever that is,' and she asked them for help figuring out which one she should get. She didn't want the high end one, and that's all she knew.
What she didn't know, and what the sales associate failed to inform her of, was that 6 months earlier BluRay had squashed HDDVD's. So next time I went to her house, and she asked me to set up her brand new HDDVD player, I just about went berserk. I should have asked where she bought it from before telling her why I was so angry. I suppose she thought I'd kill someone.
In hindsight, it's probably good she didn't tell me. I have a hard time stomaching any place that would take advantage of an old woman.
Being as I'm coming from experience on this, your statements are a bit absurd.
- People are not embarrassed to be on welfare
Um, many people are. Some people are embarrassed to collect unemployment insurance, though they're the extreme. At least for many men I know, it's embarrassing in the same way that it's embarrassing to "let" their wives mow the lawn: it's their job to do it, and it makes them uncomfortable.
- People make more money on welfare than on a minimum wage job
I don't know what minimum wage is where you're at, but it's still $5.15 in Wyoming. For a single person with a single child, it is absolutely easier to make more than you would working multiple fast food jobs by collecting from misc. federal and state welfare programs for food, housing, etc.
For instance, I know of a single mother of two who is able to make her rent in a 2-bedroom apartment, buy food exclusively from healthfood/organic stores (think: Trader Joe's, but more expensive), own a working vehicle, and take semi-regular trips to visit friends and family. She hasn't had a job since at least 2004, but her children get better healthcare than many working people I know. (She's also disenfranchised from her family.)
California's minimum wage is more than I made in a 'professional' non-helpdesk IT job 7 years ago. Not everywhere in the country works on the same wage scales.
- Either: the few people who somehow "game the welfare system" make it not worthwhile for those who use it as a legitimate safety net
- Or: most people who are on welfare are gaming the system and riding the gravy train
Yeah, it's a full-time job to game the system. The safety net is set so low, however, that by the time you actually need it, it's not going to be all that effective at catching you as you fall. It's set that low due to all the people who intentionally climb to the top floor to repeatedly jump off.
- Welfare is cheating you out of your hard-earned money
I don't know about that, but I do know that the single woman I spoke of earlier is cheating the system through the 'free' money.
- You, yourself, will never need a safety net
Bold words. I've needed one (several times), and for several weeks attempted to get it. By the time I 'qualified', I was up to my neck in bills and a day from my first paycheck at the next (temporary, part time) job. Had I not spent so much time dealing with the inane bureaucratic hoops I had to jump through to get the welfare checks (incl. the measly 'unemployment insurance' check), I'd have probably found another job sooner.
I've also been 'unemployed' long-term. More than 6 months. There comes a point (about 3 months in, if you haven't got much for savings) where you've either got to commit to gaming the system full time or "make ends meet" in some other way, because an empty fridge and overdue utility bills just don't cut it. This means several part time jobs amounting to over 50 hour work weeks, taking full part in your local barter economy, and yes, even illegal activities like taking wild game out of season (for many).
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
I'm guessing it's largely because there is no void. There's a reason that CompUSA couldn't survive...