What do Greenlight Capital's David Einhorn and a Best Buy
They both decided to wave bye-bye to Best Buy.
In Einhorn's case, it's simply an investing decision. The rock star hedge fund manager unloaded his stake in Best Buy during the second quarter, according to an investor note obtained by Reuters. Einhorn's fund posted a loss of 3.2% during the quarter as lucrative shorts -- including a smart call betting against Green Mountain Coffee Roasters
Einhorn admits to selling the consumer electronics retailer at a loss, but he should probably consider himself lucky.
An iconic hedge fund manager calling it quits on Best Buy is bad enough, but a consultant bolting is even worse.
Don Delves isn't a household name like Einhorn, but he was an independent consultant for the retailer's compensation committee for seven years before resigning last month.
Delves didn't comment publicly on his departure, but sources tell Bloomberg that he quit after Best Buy decided to give more than 100 managers retention bonuses that aren't tethered to performance targets. In other words, they are receiving bonuses just to stick around.
Think about that for a bit.
This is a company that has announced store closures and layoffs. Comps and profitability have been sluggish for two years. How is morale going to be when employees realize dozens of managers who watched this all happen are being paid more money without a tangible incentive to get it right?
For years, most observers have argued that Best Buy's biggest problem is Amazon.com
However, it's starting to become clear that the real enemy here is Best Buy itself.
"Best Buy" is anything but
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The Motley Fool owns shares of Green Mountain Coffee Roasters, Best Buy, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Amazon.com and Green Mountain Coffee Roasters. Motley Fool newsletter services have recommended creating a lurking gator position in Green Mountain Coffee Roasters. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Green Mountain. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.