Best Buy Founder Resigns as Chairman, Share Price Tumbles
By Jessica Wohl and Phil Wahba
Best Buy (BBY) founder Richard Schulze said on Thursday he is exploring all options for his 20.1% stake in the electronics retailer, leading him to immediately relinquish his roles as chairman and a director.
Shares of Best Buy, rocked earlier this year by the abrupt departure of its CEO Brian Dunn amid a probe that later found he had had an improper relationship with a female employee, were down 8.3%, or $1.66, at $18.23 in morning trading.
"That's a lot of shares suddenly on the market, you have increased supply, that's going to drive the price down," said BB&T Capital Markets analyst Anthony Chukumba.
A leveraged buyout of Best Buy would not make sense, he said.
"Even as depressed as their share price is right now, to (make an offer for) Best Buy, you're talking about probably a $10 billion deal," said Chukumba. "That's a much larger deal than I think is feasible in the current market environment."
As of Wednesday, Best Buy's market capitalization was $6.56 billion.
"I continue to believe in Best Buy and its future - and care deeply about its customers, employees and shareholders," Schulze, 71, said in a statement. "There is an urgent need for Best Buy to reinvigorate growth by reconnecting with today's customers and building pathways to the next generation of consumers."
%Gallery-154260%Best Buy named Hatim Tyabji as chairman, two weeks earlier than planned. Tyabji has been a Best Buy director since 1998. He is also chairman and CEO of Bytemobile Inc and chairman of Jasper Wireless Inc.
Schulze previously planned to step down as chairman after the 2012 annual meeting on June 21 and remain a director through the 2013 annual meeting.
Best Buy said in May that Schulze would step down as chairman after he failed to tell the board about Dunn's relationship.
Schulze served as Best Buy's CEO, chairman and a director for 36 years, until 2002. Since then, he had been chairman and a director.
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