Posted on Thursday, September 15, 2011
My friend, Paul Carroll, is peeved at Best Buy. It stems from the time his daughter’s puppy chewed up her laptop’s printer cord. Paul knew he could get the really simple cord for $2.50 on Amazon, but he had to buy it at Best Buy for $30 because she needed the cord immediately. Best Buy extracted a tremendous premium that day, and lost Paul’s good will forever.
So, for Paul and many other observers, it came as no surprise when Best Buy announced that sales had dropped for a fifth-consecutive quarter. Profits took an even bigger hit, as they dropped 30 percent. It was a surprise for many investors, however, who had the audacity to hope for a trend reversal. But that hope vaporized, and investors drove shares to their lowest level since 2008.