The Founder vs Board-Outsider situation is reminiscent of Apple when it brought in the Pepsi guy and shook Jobs out to where he formed Next and bought Pixar for a song. They brought Jobs back after the Pepsi guy really dorked things up badly; and Jobs developed his iBrands cash flows before he croaked. And now all the hi-tech firms are suing one another over patent issues; the intent being to get a leg up in the growing mobile communication market with thinking being the desktop is now near saturation and the growth is in mobile.
Best Buy is NOT Micro Center, it competes on price less than on expertise and botique cachet.
Nor is it New Egg, online.
It has Amazon and Walmart to contend with for the unsophisticated consumer market and in that niche, those who have some smarts can use Best Buy as the showroom, and then buy online based on price.
Latest Strib reporting, here and here.
If Bain has any share of the takeover pool participation, it has not been mentioned. The reporting is good.
Of interest is the juxtaposition of the Board's version of the story, and Schulze's - which is well reported by Strib. Also of interest, how can an upscale hotel guy fit in a bottom feeder mass-marketing operation that hires low wage help? If the board believes that the firm can be recast itself as a Micro Center or New Egg, it's delusional. If Schuze's correct that the board is stalling for time to bring in the Christmas loot and make Schuze pay a higher buyout price; Schuze has no reason to wait and every incentive to move quickly.
Geek Squad is the interesting piece of Best Buy; where Amazon and Walmart are absent.
The stage is set for a hostile takeover, with all the charm of the publicity it would generate. Driving more consumers to Walmart is one likelihood. Walmart has a broader base of sales, it is not concentrated in electronics, and if consumers fear warranty problems and a possible bankruptcy situation; the wisdom would be to go Walmart, or Amazon.
What's a shareholder to do? One guess is the hedge funds and big institutional investors are no longer into Best Buy, but the arbitrageurs are on the scent and in position. Any reader holding Best Buy shares and wanting to comment would be welcome.
UPDATE: Strib's timeline of its earlier Best Buy reporting.
