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Blockbuster wants to buy Circuit City. WTH?

April 14, 2008

Ok, that one is really random. I just found out that Blockbuster has offered up a bid to buy Circuit City. The “unsolicited” amount is supposed to be $1 Billion+. Well, it seems to be at $1.35 Billion. Hmm, let me restate that. WTF? Blockbuster is planning on buying Circuit City. It just doesn’t really make sense. For one, Blockbuster has been going down the drain for the last, I don’t know, 5 years? Their business is terrible. I attribute to their customer service and outrageous pricing when compared with rivals such at Hollywood Video rentals. What I really want to know is where they mustered up this amount and which person thought it was reasonable. I frankly don’t really like Circuit City, but I don’t have beef with them either. I’ve had better experiences with their merchandise than say, Bestbuy. But, $1.35 billion? That’s it? They’re one of the major chains. Sure, their business may be slipping down the drain slowly as well, but they shouldn’t be compared along with the likes of CompUSA.

Analyst Michael Pachter said that he feels this move is reckless. Well, I agree. Circuit City’s Board of Directors are scrutinizing the offer, questioning whether Blockbuster will be able to follow through. I don’t believe this merger is going to happen. It just seems strange. They offer up a sum of money which doesn’t seem like they have. The offer itself seems iffy(to me, anyway) for such a large retailer as Circuit City. And now, many people are questioning their thinking. It seems this merger is slowly going the way of the legendary HP-Compaq Merger back in 2001, which many people opposed. Although, HP-Compaq is pretty successful now, this merger doesn’t seem like it’ll go the same way. We’ll be lucky to see Circuit City retain it’s own charm.

In case you haven’t noticed, I don’t really care for Blockbuster in the least. But this move just completely throws me.

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