Tag Archives: Circuit City

A cautionary tale for cash-strapped builders?

Circuit City is being liquidated, at a loss of 30,000 jobs and every penny of stockholder equity. This is the idiot company that fired all its tech-savvy employees and replaced them with minimum wage workers, the better to drive customers away, so its collapse is hardly a surprise. The same genius CEO who devised the “abandon all knowledge” staffing plan rejected a private equity offer of $17 per share in the beginning of 2005. It reminds me of the spec builder who last year refused a bid of $7 million for his unsellable North Street project in January, only to be forced to sell it for $4.5 later that summer. At least his lenders recovered some of their investment – I suspect that, as this year progresses, lenders are going to look more and more like Circuit City shareholders. Ouch.

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