Back in August, I wrote an article (Is Circuit City going out of business?) about poor customer service at Circuit City and how I predicted that it would soon fold. Today, I noticed the stock trading at about 35 cents per share:
As you can see, it’s stock price can’t get any lower. Back in August, I recommended that you sell your Circuit City stock. But, if you haven’t sold it by now then it’s pointless. In fact, I might even make the opposite argument … BUY Circuit City stock now! Why?
Well, for one, it can’t get much lower. But for another, it will likely be bought by Best Buy or Target or Amazon or some other company before it completely goes out of business. Usually, a company’s stock price will spike up a bit at the announcement of a potential purchase. So, I would buy now, wait for the announcement and then decide to sell or hang on to it. Who knows, maybe somebody will read this article and do something about the customer service (and the economy) and it may magically rise to its high of $30/share.
But, having said that, I still think that Circuit City customer service sucks and it’s only a matter of time before a decision has to be made to merge, sell, or go under.