Analyst Sees Big Value in Circuit City Deal
Will the possible sale of Circuit City unlike value and lead to success for the company? One analyst seems to think it can.
According to the Tech Trader Daily blog on Barrons.com, Citigroup analyst Tony Wible has written to his clients that if Blockbuster succeeds in purchasing Circuit City, it will lead the two chains to “drastically improve the in-store experience while boosting entertainment sales.” Wible also expects overlapping stores to be combined, and for the chain to add “beverage and video game lounges and kid zones.” Wible wrote that earnings and stock prices could both skyrocket under such a scenario.
Other analysts were less enthusiastic, according to Barron’s; Gary Balter of Credit Suisse questioned why Blockbuster investor Carl Icahn would want to buy a company which has “a store base that includes nearly two-thirds of stores they would rather not be in.”