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Circuit City Shares Fall Prior to Shareholder Meeting

23 Jun, 2008 By: Erik Gruenwedel



Shares of Circuit City Stores Inc. June 23 fell more than 21% (91 cents) the day before the fiscally challenged consumer electronics retailer holds its annual shareholder meeting.

Investors remain concerned whether CEO Philip Schoonover can resurrect the chain's fiscal fortunes that haven't produced a profitable quarter for more than a year.

The Richmond, Va.-based No. 2 consumer electronics retailer continues to move in the opposite direction of rival Best Buy Co. Inc., as it recorded near double-digit same-store (open at least 12 months) first quarter sales declines across multiple categories, including audio, video (television, digital imaging and camcorders, and PCs.

Circuit City reported losses of nearly $165 million, three times the loss ($55 million) it posted during the previous-year period.

Arvind Bhatia, analyst with Sterne Agee in Dallas, told The Associated Press the price drop could alter the acquisition bid Blockbuster submitted last month.

The rental chain continues to evaluate Circuit City's books.

Edward Woo, media analyst with Wedbush Morgan Securities in Los Angeles, previously said the results underscored Wall Street's hesitation toward Blockbuster's buyout offer.

“Technically, Blockbuster is still doing its due diligence, but unofficially, it adds more fuel to the fire about why [it] should just walk away from Circuit City's troubles,” Woo said.Shares of Circuit City Stores Inc. June 23 fell more than 21% (91 cents) the day before the fiscally challenged consumer electronics retailer holds its annual shareholder meeting.

Investors remain concerned whether CEO Philip Schoonover can resurrect the chain's fiscal fortunes that haven't produced a profitable quarter for more than a year.

The Richmond, Va.-based No. 2 consumer electronics retailer continues to move in the opposite direction of rival Best Buy Co. Inc., as it recorded near double-digit same-store (open at least 12 months) first quarter sales declines across multiple categories, including audio, video (television, digital imaging and camcorders, and PCs.

Circuit City reported losses of nearly $165 million, three times the loss ($55 million) it posted during the previous-year period.

Arvind Bhatia, analyst with Sterne Agee in Dallas, told The Associated Press the price drop could alter the acquisition bid Blockbuster submitted last month.

The rental chain continues to evaluate Circuit City's books.

Edward Woo, media analyst with Wedbush Morgan Securities in Los Angeles, previously said the results underscored Wall Street's hesitation toward Blockbuster's buyout offer.

“Technically, Blockbuster is still doing its due diligence, but unofficially, it adds more fuel to the fire about why [it] should just walk away from Circuit City's troubles,” Woo said.

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