Is Best Buy (BBY 2.97%) finally going to be taken private?
Reports once again surfaced this week that founder Richard Schulze is still interested in taking the struggling consumer-electronics giant private. The challenge is that Schulze owns only 20% of the company. He still needs to convince a consortium of private-equity investors that buying into the chain will be a winning bet. Schulze may have sentimental attachment to Best Buy, but private-equity firms just want to make sure they don't lose money. Schulze may not like their answer.
Best Buy has meandered for nearly two years, and it's not the economy that's holding the retailer back. The company's model is flawed. As the pros begin their due diligence, they'll have to weigh the concept's viability, and that's where the perceived value in Best Buy's shares may crumble.
This will be an interesting situation to watch.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Apple (AAPL 0.83%) finally nixed Ping, its short-lived two-year experiment in giving iTunes a social spin for music fans. Was it the 30-second samples in a world where every music site offers full clips? Was it the "buy" button wallpaper of commercialization? In the end, it doesn't matter. Apple isn't perfect. You don't need to bring up Antennagate or Apple Maps to prove that point. But it's still good enough when it does get things right.
- Jefferies analyst Cynthia Meng is the latest Baidu (BIDU 0.90%) tracker to turn cautious on China's top search engine. Meng is downgrading the stock from buy to hold, slashing her price target on Baidu from $135 to $125. This may be the first time in ages that investors can snap up Baidu at a forward earnings multiple in the teens.
- Chipotle Mexican Grill (CMG +0.95%) is the latest short target of billionaire hedge-fund manager David Einhorn, but did he really have to compare the popular burrito roller with Taco Bell? Even the Taco Bell Chihuahua is shaking its head at that comparison.
- Zynga (ZNGA +0.00%) took a hit on Thursday after hosing down its outlook. Social gaming hasn't been much of a treat for investors. Now investors may want to buy some virtual coins to see whether they can overcome the real ones that they've squandered.
