Down But Not Out

After a rough couple years, Best Buy is struggling to stay afloat like many other electronic stores.  Other stores like Circuit City have closed there doors for good and it seems like Best Buy is struggling to be the company they once was.  People like the convenience of shopping online and it is really affecting a lot of Best Buy’s business.  To deal with this decrease in sales, Best Buy has had to close a few stores.  Despite the decrease in sales this quarter, the company is very optimistic about their future as well as there current forecasts.  In this first quarter of 2013, Best Buy announced that their sales were very close to their forecasts. Their stock is up over 126% this year and they rank 3rd on the S&P 500’s best stocks of 2013.

Can Best Buy survive unlike the other failing electronic stores?  Online shopping keeps becoming a bigger phenomenon and I think that it is going to affect Best Buy in a negative way.  People aren’t  reluctant to go the store to buy electronics when it can be just a click away at home.  I  think that Best Buy’s customer service rating is also another reason why they are struggling. Their profit from continuing operations  was down over 54% this past year.  That being said, Best Buy is still open and are still doing over 10 billion dollars of sales every year.  Best Buy has also been making a lot of operational changes in each one of their stores.  They have continued to remove wasteful processes as well as trying to re-position their brand so that they can be more competitive with online shopping. They have also implemented a price-match guarantee so that they can stay competitive with companies like Amazon.   Their forecasts have also been very accurate which is definitely a plus for the company.  Their sales are down in the past few years but since there forecasts have been so spot on, there aren’t really any surprises in the sales numbers. Best Buy continues to fight and claw its way back up to the top where they sat for many years. I think the only way they will be successful again is if they improve the online shopping aspect of their company.

Is Best Buy a company you would feel comfortable investing in?  Their stock price has been doing great so far in 2013, but do you think in the upcoming years they will continue to grow? Many other electronic companies have failed in the past, is Best Buy too big to fail at this point? Is online shopping going to completely take over all electronic stores?  The future is very uncertain for Best Buy.  However, they do seem like they are headed in the right direction.

The New Golden State


This year the Golden State Warriors made the playoffs for the first time in over 5 years.  The time before that was 1994.  The Warriors have been struggling with fan attendance as well as performance in the last 20 plus years. Last year before the 2011-2012 season the team was sold to Larry Ellison the CEO of Oracle and Joe Lacob. With brand new ownership and team attitude, the Warriors have shown to be one of the premier teams in the Western Conference this year.  Ticket sales are up to an all time high and the fan following is also some of the most passionate in the league.  It has been confirmed that the franchise will build a brand new arena right on pier 32 in San Francisco.  The construction will start in the next couple years and it is expected to be completed by the 2017 season.  This construction will be personally financed by the two owners and will not need any funding from the city of San Francisco.  From a financial standpoint, is this a smart investment for these two owners? Does one successful year justify the construction of a brand new 500 million dollar arena?  Ellison and Lacob feel like this is the new direction for The Warriors.  Their current stadium is over 40 years old and is located in Oakland.  The Warrior organization believes the economic opportunity is far greater in San Francisco then it would ever be across the bay in Oakland. The state of California really loves basketball because it houses 4 NBA teams.  Golden State in the past has taken a back seat to both the LA Clippers as well as the LA Lakers.  With this  move in the upcoming years, will that propel them to be one of the most popular NBA teams in California.  The new facility will also have space open for restaurants and other businesses just a few steps from the arena.

Right now they are in the planning stages and it seems like  they are a far way from the actual construction of the arena.  They have a few obstacles such as building permits standing in their way.  The owners must have forecasted that the teams popularity will keep growing throughout the next few years.  If the ownerships forecasts are not as high as they predict then this new stadium could end up being a huge disappointment.  A similar situation is happening to the Miami Marlins and there new ballpark where attendance is the lowest in the league.  Do you think the construction of this arena is a smart decision? Will the planning stages take longer than they anticipate? This new arena will definitely bring a lot of revenue to the city of San Francisco, but will it ever make the Warrior organization any money?