If the stock market is any indication of the success of electronics retailer Best Buy Co. (BBY
), it is worth remembering that its shares traded just below $49 nearly three years ago. Even after rallying since the start of the year, shares currently trade under $26. Best Buy has been its own worst enemy.
CEO Brian Dunn, who was charged with the company's turnaround, was fired in May 2012 for a relationship with a female employee. Founder and chairman Richard Schulze left under a dark cloud shortly thereafter when it was discovered he knew of the affair and did not tell the rest of the board. Then, last August, Schulze offered to take Best Buy private. Recently, he dropped the deal and rejoined the board. Even Schulze couldn't make the case that the company was healthy enough to be taken over, which raises the question of whether he believes the company he started has a dim future.
One of Best Buy's problems is that it has become the showroom for Amazon.com Inc. (AMZN
). This was on display when it announced the financials for the quarter that ended on March 3, 2012. The company said that it had lost $1.7 billion, compared to a profit of $651 million the year before, and would close 50 stores. Best Buy also said that the critical marker of same-store sales had fallen, and that it expected the slide to continue.