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selfbnd411 -> May Day revenge hits Circuit City (5/1/2007 1:02:43 PM)
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Hehe! Remember Circuit City? Two months ago they fired their best (and best paid) sales staff and replaced them with lower paid unskilled employees. Well, last night Circuit City had an announcement--they're getting absolutely DESTROYED in the marketplace. Apparently, 16 year old kids who don't know the difference between HDTV and HGTV aren't the most effective salespeople in the world.
The stock was taken down 10% in the after hours and it has MUCH further to fall according to many analysts. This company is dead in the water, and the biggest issue they face isn't overpaid workers--it's an utterly incompetent management team that is being eaten alive by well run outfits like Best Buy. At the moment it's down around 6%.
Now for the best part--According to CNBC, Circuit City gave a number of executive officers sweetheart deals for stock options despite pleading poverty when it came to employee wages. But the management team's god-awful performance destroyed the stock, so those options are worthless for now! This is because the strike price (the price the executive would have to pay to get the stock) is actually above the market price right now. Sure, at some point Circuit City's stock could rise above the strike, but I don't see this company going anywhere but down.
Happy May Day!
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