Monday, January 14, 2008

Circuit City's Largest Shareholder Gives Up

The TCW Group, formerly Circuit City's (CC) largest institutional investor, slashed its 10.9% stake (reported in August)in the soon to be bankrupt retailer to .2% according to a Securities and Exchange Commission filing Thursday.

TCW cashed out losing approximately $128 million on its investment since last summer. They did not issue a comment regarding the sale probably because they, like I, are left wondering not only how CEO Schonoover still has a job, but how he managed to get multi-million dollar retention bonuses to the management that has ruined the compnay pass the board.

When you consider Best Buy (BBY) only scratched out a 1.5% sales gain this holiday season which is low when you consider out thirst for electronic devices currently, one has to wonder how many days CC has left. Best Buy is clearly the class of the space and to call CC a "distant second" is really just giving it far too much credit.

I have blogged about CC a bit in the past and will continue to do so until Schonoover is gone.

Why? They should be making money!! They have both the foot traffic and online site traffic to compete yet don't. They have the locations and the PR to make money yet do not. The ONLY reason shareholders are suffering is due to Schonoover's incompetence. Period..

With the stock at these levels, a change at the top would turn it around immediately... until that happens... I'm here..

Disclosure: None

Todd Sullivan's- ValuePlays

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