Best Buy On The Road To Perdition

Stocks:  (BBT)(WMT)(DELL)

Best Buy’s CEO has stated that he will match Wal-Mart’s pricing on consumer electronics. As a matter of fact, he will match anyone’s prices. The consumer electronics retailer is competing with mega-stores like Wal-Mart and online retailers like Dell. Sort of caught in the middle.

Best Buy’s stock is near the high of $58 that is set in April. This was not just a recent high. The stock has not traded above this point  in the last five years. It now trades around $55.

Matching Wal-Mart’s prices may be the only option Best Buy has to keep store traffic and e-commerce purchaes at a good level. But, it could really pound the old operating margin.

It is not good news.

Douglas A. McIntyre can be reached at [email protected]. He does not own shares in companies that he writes about.

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